Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

BALA TO TRAWSFYNYDD HIGHWAYS (LIVERPOOL CORPORATION CONTRIBUTION) BILL

Read the Third time and passed.

CORNWALL COUNTY COUNCIL BILL SAINT PETER UPPER THAMES STREET CHURCHYARD BILL

As amended, considered; to be read the Third time.

ESSEX COUNTY COUNCIL (FULLBRIDGE. MALDON) BILL [Lords]

To be read a Second time upon Thursday.

Oral Answers to Questions — GOVERNMENT INFORMATION SERVICES

B.B.C. (External Services)

Mr. Mayhew: asked the Chancellor of the Duchy of Lancaster what proportion of the overall cost of the overseas information services was attributable to the British Broadcasting Corporation's external services in 1957, 1958, and 1959, respectively.

The Chancellor of the Duchy of Lancaster (Dr. Charles Hill): Figures are available for financial years only. They are: 1957–58, 439 per cent.; 1958–59. 41·9 per cent.; 1959–60, 390 per cent.

Mr. Mayhew: Is the right hon. Gentleman aware that the Communist countries increased their external broadcasting by 15 per cent. last year, at a time when the B.B.C, owing to rising costs and the right hon. Gentleman's allocation, were compelled to cut theirs? What possible sense

can there be in this? Is the right hon. Gentleman further aware that the new suggested budget for the B.B.C. is quite inadequate to meet the needs and the opportunities?

Dr. Hill: In this form it suggests a reduction. In fact, the allocation for the B.B.C. has increased during the three-year period. The fall in percentage is due to the very substantial increase in the provision for the British Council, for the teaching of English, libraries and the like, and the improvement in official information services, particularly in the Commonwealth.

Mr. Lipton: asked the Chancellor of the Duchy of Lancaster why English broadcasts in the European Information Services of the British Broadcasting Corporation are being cut; and what savings will be made as a result.

Dr. Hill: To switch £2,000 to a more useful purpose.

Mr. Lipton: Is this not a miserable and foolish economy? Is the right hon. Gentleman aware, for example, that the very useful half-hour programme broadcast at 7 o'clock every morning for English-speaking listeners is being cut in the next week or two? What is the point of cutting a valuable programme like that, which is doing a lot of good, especially in view of the extension of foreign broadcasting by Russia, China and many other countries?

Dr. Hill: What has been done is to cut the repeat of a programme which is being given an hour earlier, there being given at the time of the repeat another programme in English of a news commentary character, in the General Overseas Service.

Mr. Mayhew: When Britain can do this overseas broadcasting better than any other country in the world, why do we cut it down in this way instead of expanding it?

Dr. Hill: If we are to use our resources to the full, we must switch them from time to time. In the case of European broadcasting, six-sevenths of it is in the language of the country of reception. That is not being touched. What is being saved here is a sum of £2,000 on a programme which, in fact, has its counterpart at the same time in another English programme.

Oral Answers to Questions — PENSIONS AND NATIONAL INSURANCE

Contributions

Mr. McKay: asked the Minister of Pensions and National Insurance what were the total payments made by all the insured contributors to National Insurance, Industrial Injuries Act, and to the National Health Service for the year 1958–59; what was paid by the employers in the private sector and public sector of industry, respectively; what tax relief the employees as a whole received; what tax relief was received by the employers in the private sector, and the public sector, respectively; and what percentage of the contributions was recovered as tax relief in each case.

The Minister of Pensions and National Insurance (Mr. John Boyd-Carpenter): The answer to the first part of the Question is approximately £460 million. Contributions paid by employers in the public and private sectors of industry during 1958–59 are estimated as £120 million and £281 million, respectively, sums which I understand would have yielded tax of under £500,000 in the first case, and £143 million in the second, representing less than ½ per cent. and 51 per cent. of the contributions paid. The total tax relief for employed contributors was approximately £40 million, representing about 1.0 per cent. of contributions paid by them.

Mr. McKay: I thank the right hon. Gentleman for that information.

Widow's Pension (Personal Case)

Sir R. Nugent: asked the Minister of Pensions and National Insurance if he will state a case for consideration by the High Court as to whether the contributions under the Contributory Pensions Acts paid in respect of the late Mr. William Comins, from 1942 to 1946, do not entitle his widow to a widow's pension.

Mr. Boyd-Carpenter: The contributions referred to were payments made by Mr. Comins' employer on the basis that Mr. Comins was not an insured person. Mrs. Comins was disallowed widow's benefit following a decision that in these circumstances the contribution conditions for such benefit were not

satisfied in her case. As my hon. Friend is aware, the reasons for the decision have been fully explained to her on several occasions, but I am arranging for a formal statement of the grounds of the decision to be sent to her, on the basis of which she can, within 21 days of its receipt, if she is advised that a point of law arises, ask for the issue to be determined by the High Court.

Sir R. Nugent: Is my right hon. Friend aware that his decision, which in this case is a generous one, will be received with gratitude both by my constituent and by myself?

Mr. Collick: Can the Minister tell us why it has taken so long to reach the decision which he has now announced?

Mr. Boyd-Carpenter: The decision was reached a good many years ago. The new point in the matter is the request made by my hon. Friend, on behalf of his constituent, that it should be in a form which would render it possible to appeal to the High Court.

X-ray Examinations

Dr. Dickson Mabon: asked the Minister of Pensions and National Insurance whether he is satisfied with the number of recurrent annual X-rays carried out on pensioners and others for purposes of reassessment of award.

Mr. Boyd-Carpenter: Yes, Sir. I would add that my Department's practice in respect of X-ray examinations is in full accord with the recommendations of the Medical Research Council on radiation hazards.

Dr. Mabon: Will the Minister reconsider this point, especially in view of the recent regulations issued by the Ministry of Labour under the Factories Acts, 1937 and 1948, dealing with ionising radiation? Is he aware that these regulations, admirable as they may be, make inconsistent the present-day practice in his own Ministry? Will he consider the matter again and ensure that the maximum dosage recommended in the various categories is made safe, in view of the danger that might arise from the over-use of these X-rays?

Mr. Boyd-Carpenter: I know the hon. Member is well informed on these matters. I will gladly look into any point he raises.

Retirement Pensions

Mr. Awbery: asked the Minister of Pensions and National Insurance if he will give the amount paid in pension to single and married persons in 1945, together with the dates and amount of each subsequent increase.

Mr. Boyd-Carpenter: As the Answer consists; of a number of figures, I will, with permission, circulate it in the OFFICIAL REPORT.

RATES OF RETIREMENT PENSION


Widows', Orphans' and Old Age Contributory Pensions Act, 1936
Date
Single Rate
Increase
Married Rate
Increase




s.
d.
s.
d.
s.
d.
s.
d.


1945*

10
0
—
20
0
—


National Insurance Act, 1946
30th September,1946

26
0
16
0
42
0
22
0


3rd September, 1951
†
30
0
4
0
50
0
8
0


1st October, 1951


29th September, 1952

32
6
2
6
54
0
4
0


25th April, 1955

40
0
7
6
65
0
11
0


27th January, 1958

50
0
10
0
80
0
15
0


Notes

✶ The rates shown for 1945 relate to the contributory old age pensions then in payment under the Widows', Orphans' and Old Age Contributory Pensions Act, 1936, and were restricted to the classes of people eligible under that Act.

† The increase in 1951 was effective from 3rd September for existing pensioners over age 70 (men) or 65 (women) and from 1st October for others then of pension age. Subsequent awards to pensioners who had not reached pension age by 1st October, 1951, were at the old rate of 26s. (42s. married) to be increased to 30s. (50s. married) from the pensioner's 70th birthday (65th birthday for women).

Mr. Reynolds: asked the Minister of Pensions and National Insurance by how much the present single retirement pension of 50s. would require to be increased or decreased to give it the same increase in purchasing power over the 1946 pension of 26s. as there has been in the purchasing power of the average wage in 1946 over the average wage in 1960.

Mr. Boyd-Carpenter: For men an increase of 8s. 4d. would be needed, and for women 5s. 11d.

Mr. Reynolds: Does not the Minister agree that in equity and in order to allow those people who are living on pensions and other forms of National Insurance benefits the same increase in their standard of living as employed people have had—when we could all say that we have never had it so good—the Government should increase their expenditure in this direction? Is the Minister further aware

Mr. Awbery: Can the Minister tell us whether the first increase in pensions given in 1945 or 1946 increased the pension for the single man from 10s. to 26s. and for the married couple from 20s. to 42s.?

Mr. Boyd-Carpenter: When the hon. Members studies the table he will find happy corroboration of his figures.

Following is the information:

that hon. Members on this side of the House, and probably the majority of hon. Members opposite, will be prepared to support him in such public expenditure against any attacks he might receive from the hon. Member for Kidderminster (Mr. Nabarro) and his friends?

Mr. Boyd-Carpenter: The hon. Member will be aware that the figures given in reply to the Question as he framed it refer only to relativities in regard to a certain category of earnings and that in real and absolute terms there has been an appreciable improvement.

Mr. Nabarro: Is it not implicit in this Question that the hon. Member suggests that the retirement pension should be linked to wages, in some way or other?

An Hon. Member: Like votes to speeches. [Laughter.]

Mr. Speaker: This is such fun, but so delaying.

Mr. Nabarro: May I continue, Mr. Speaker? Would not my right hon. Friend concede at once that such a proposition is wholly untenable and was strenuously resisted by the party opposite when it was in power between 1945 and 1951?

Mr. Boyd-Carpenter: Whatever may be implicit in the hon. Member's Question, I thought my duty was to answer that part which was explicit, and that I endeavoured to do.

Mr. Lawson: asked the Minister of Pensions and National Insurance whether the difference of 6s. 2d. in the value of the 50s. retirement pension over that of the 26s. pension in 1946 is expressed in terms of 1960 prices or of 1946 prices.

Dr. Dickson Mabon: asked the Minister of Pensions and National Insurance by how much the single retirement pension of 50s. would require to be increased to give it a real value of 6s. 2d., in terms of 1946 prices, over the value of the 26s. pension in 1946.

Mr. Willis: asked the Minister of Pensions and National Insurance what would be the cost of raising the single basic pension from its present 50s. to a level where it would have a current purchasing power equal, in terms of 1946 prices, to 6s. 2d. above the 26s. pension in 1946.

Miss Herbison: asked the Minister of Pensions and National Insurance if he is aware that the single retirement pension in 1960 represents a purchasing power at 1946 prices of only 3s. 8d. more than the purchasing power of the 26s. pension in 1946; and if, in view of this, he will take steps to raise the existing retirement pension so as to enable present pensioners to enjoy a rise in their living standards comparable with the rise in living standards enjoyed by other sections of the British people.

Mr. Hamilton: asked the Minister of Pensions and National Insurance if he will raise the 50s. single retirement pension so as to give it a real value, in terms of 1946 prices, of 6s. 2d. more than the value of the 26s. pension in 1946.

Mr. Boyd-Carpenter: Using the retail prices index and the former cost of living index, the value of the present 50s. pension exceeds that of the 26s. pension in

1946 by 6s. 2d. in terms of 1960 prices and 3s. 8d. at 1946 values.
An increase of 4s. 3d. would be needed to brings the 50s. pension to the value of 32s. 2d. in 1946. This would cost about £80 million a year immediately, assuming a corresponding increase in other benefits.
On the general question of the level of National Insurance benefits, I would refer the hon. Members to what I said during the debate on 16th March, to which I have nothing to add.

Mr. Lawson: Is the Minister aware that it is what he said during the debate which has provoked these Questions, and that it now emerges—differently from what he and his hon. Friends said —that in 1946 terms the pension is now worth only 3s. 8d. more? Is he satisfied that after fifteen years this is the best the nation can afford for the old-age pensioners?

Mr. Boyd-Carpenter: There is nothing inconsistent between what was said from this side of the House in the debate and the figures I have given. The figures that have generally been used in our previous controversies—as no one knows better than the hon. Member for Motherwell (Mr. Lawson)—are the figures at current prices, which are the prices at which the retirement pensioner has to buy what he needs.

Mr. Lawson: When the right hon. Gentleman and his hon. Friend the Joint Parliamentary Secretary talk about the real value of the pension as compared with 1946, are they talking about current prices?

Mr. Boyd-Carpenter: Certainly. We are speaking in terms of what the pension will buy, which, though it may not interest the hon. Member, interests the pensioner.

Dr. Mabon: In view of the Minister's speech, surely he will either raise the pension by 2s. 6d. to justify his own argument in the debate some time ago, or write to the Conservative Central Office telling it to end propaganda which makes claims like this.

Mr. Boyd-Carpenter: I doubt whether my argument, or the Central Office propaganda, requires reinforcement.

Mr. Willis: Does the right hon. Gentleman not think that these very small amounts are really a positive disgrace in view of the tremendous increase in productivity since 1946, and does he not really consider that he ought to do more for the old-age pensioners than give them an extra packet of cigarettes a week?

Mr. Boyd-Carpenter: This Government have nothing to fear from hon. Gentlemen opposite on any account of what has been done for the pensioners.

Mr. Mendelson: Would not the right hon. Gentleman agree, on the basis of the assessment which he has given today of how much it costs, he at any rate is responsible for his Department and for the well-being of the pensioners and that he ought to be pressing his colleagues now to increase the pension, particularly at this time of the year when these things are decided?

Mr. Boyd-Carpenter: I dealt with this matter at considerable length as recently as 16th March. Surely hon. Gentlemen will not expect me to add to that at this date.

Hon. Members: Why not?

Mr. Ross: asked the Minister of Pensions and National Insurance if he will state, in 1946 prices, the value of the single retirement pension in October, 1952, 1955, and 1959.

Mr. Boyd-Carpenter: 23s. 7d., 26s. 5d. and 29s. 10d., respectively.

Mr. Ross: Will the right hon. Gentleman have a word with the Chancellor of the Exchequer at this rather timely point and urge on him that whatever he has got to spare ought to go to the old-age pensioners rather than to anybody else at this time of the year?

Hon. Members: Answer.

Mr. Millan: asked the Minister of Pensions and National Insurance if he will calculate the improvement in real purchasing power of the single retirement pension in 1960 over that of October, 1946, in terms of a prices index specially calculated to take account of the pattern of retirement pensioners' expenditure.

Mr. Boyd-Carpenter: No, Sir. No basis exists for making such a calculation in respect of retirement pensioners generally.

Mr. Millan: Is the right hon. Gentleman aware that the old-age pensioners have no confidence at all in the Government's Cost of Living Index? Is he also aware that they very much resent all the arguments which are produced by the Government with reference to that index, and that what they really want is an immediate increase in the pension?

Mr. Boyd-Carpenter: The hon. Member's Question, of course, relates to the index and not to the pension. On the first part of his supplementary question, I am bound to say that I and, I think, the majority of our fellow countrymen think otherwise.

Mr. Houghion: Is the right hon. Gentleman aware that the retirement pensioners do not understand these figures? They do not believe them? All they know is they have not enough to live on. What is he going to do about that?

Mr. Boyd-Carpenter: I would remind the hon. Gentleman that, if he is right, on that hypothesis his hon. Friend's Question asking for more of these figures would not exactly help.

Unemployment Benefit

Mr. Warbey: asked the Minister of Pensions and National Insurance whether, following experience of the working of Section 4 of the National Insurance Act, 1957, he will introduce amending legislation to enable five-day week workers to qualify for unemployment benefit when working only four days a week.

Mr. Boyd-Carpenter: No, Sir.

Mr. Warbey: Is the right hon. Gentleman aware that there is obviously an unfair discrimination against those working in the furniture and textile trades and many other trades in that when they are working short-time they find themselves debarred from receiving unemployment benefit, whereas other workers, possibly in the same firm, are able to receive benefit because they have worked more than 25 Saturdays in the preceding year? Will he consider the matter again, in consultation with the unions?

Mr. Boyd-Carpenter: The principle, as the House may remember discussing when the 1957 Measure was going through the House, is that one should not be entitled to claim unemployment benefit in respect of a day when, in the ordinary course, one would not be working, even if work were available. The House accepted that principle at the time.

Mr. Houghton: Is the right hon. Gentleman aware that his reply will cause great disappointment among many trade unions, which are finding this problem of increasing difficulty? Is he aware that the National Insurance Act was based on conditions of a six-day week, which has now been replaced so widely by a five-day week, and that the conditions for unemployment insurance should be adapted to changing working conditions?

Mr. Boyd-Carpenter: It was precisely to make the necessary adaptation to the changing conditions that Section 4 of the 1957 Act was passed.

Mr. Whitlock: Will the Minister consider the objections of the T.U.C. which were made at the time when the Clause was first introduced, in order that the anomalies and injustices of the Clause may be further examined in the light of those objections?

Mr. Boyd-Carpenter: All the representations made at the time of the passage of the Bill through the House were carefully examined. Nothing which has happened since justifies me in modifying the views then formed.

Oral Answers to Questions — COAL

Distribution

Mr. Whitlock: asked the Minister of Power whether it is now the Government's intention to implement the proposals of the Robson Committee for improving efficiency in coal distribution.

The Minister of Power (Mr. Richard Wood): The Committee's only recommendation in this regard related to the establishment of large, fully mechanised coal depots. On this, I would refer the hon. Member to my reply on 23rd November, 1959, to the hon. Member for Wigan (Mr. Fitch).

Mr. Whitlock: But will the right hon. Gentleman agree that between the pithead and the fireplace there is a multiplicity of factors, agents, middlemen and retailers—

Mr. Nabarro: And the co-ops.

Mr. Whitlock: —and has he considered the suggestion of the Robson Committee of an investigation into the possibilities of rationalising this trade?

Mr. Wood: I answered the hon. Gentleman's hon. Friend earlier to say that my predecessor recognised that he was obliged to hold consultations about this matter; but there are a number of difficulties, as the hon. Gentleman will be aware, in face of the setting up of these mechanised coal depots. I am perfectly willing to help in those discussions if those discussions reach a point at which I usefully could help.

Prices

Mr. Whitlock: asked the Minister of Power whether he has given consideration to the proposals of the Robson Committee that the Government should keep closely in touch with the movements of retail coal prices and the reasons for them; and what action he proposes to take.

Mr. Wood: I have kept myself generally informed, but I think these prices are best left to be settled by competition between traders and between different fuels. The National Coal Board has kept its basic wholesale prices for house-coal unchanged for nearly three years and it is important to the future of the retail coal trade that the prices charged to the final consumer should also be kept down.

Mr. Whitlock: But is the right hon. Gentleman aware that, though merchants receive coal in seven quality grades agreed by the trade, they are not compelled to retail at the appropriate prices agreed and some are advertising low grade coal with distinctive trade names and selling it at high grade prices? Does he not agree that this is entirely unsatisfactory and is as bad as selling short-weight deliveries? Will he protect the consumers in some way?

Mr. Wood: The hon. Gentleman has raised a number of detailed questions which I should be only too willing to


discuss with him, if he would like to discuss them. On the general question, there has been some small increase in retail prices in the last two years, but I think the retailers are perfectly well aware of the very great damage which would be done to the retail coal trade if their prices rose a great deal further.

Small Mines

Mr. S. O. Davies: asked the Minister of Power what representations have been made to him by, or on behalf of, the small mine owners; whether he is aware that conditions are about to be imposed on them which are likely to result in the closing down of many small mines and rendering thousands of miners unemployed; and if he will make a statement.

Mr. Swingler: asked the Minister of Power what representations he has received from operators of small mines concerning threatened closures and cuts in production; what action he has taken; and if he will give a general direction to the National Coal Board to suspend any decisions about the future of licences, pending the calling of a national conference under his chairmanship to discuss the matter.

Mr. Wood: On 23rd February I met a deputation from the Federation of Small Mines, who expressed concern about the effect of the National Coal Board's proposals for reducing the output of the licensed mines. I have discussed this with the Board, which is responsible for determining the conditions of license of these mines. The Board assures me that it is willing to resume negotiations as soon as it is approached by the Federation.

Mr. Davies: Will the right hon. Gentleman take note of the fact that the attitude of the National Coal Board has been infinitely more heroic at the expense of these very small mines as compared with its attitude to the vast opencast schemes which have put thousands of miners into the ranks of the unemployed?

Mr. Wood: I think that the hon. Gentleman and I and the whole House are most anxious that these discussions which are going to take place between the Board and the Federation should be successful. Therefore, I do not want to add at the moment to what I have said.

Mr. Swingler: Would the right hon. Gentleman say on what terms it is proposed that the negotiations should be resumed? Is he aware, for example, that the proposal, made at any rate in north Staffordshire, was to impose a very much heavier cut in the production of small mines than of the coal industry generally? This would have the effect of putting out of work many of the older, partially disabled mine workers who would find it very difficult to get other jobs. Is he saying that it is proposed to reopen the negotiations without any specific conditions?

Mr. Wood: These negotiations, as I say, will take place between the Board on the one hand and the Federation on the other. Therefore, the terms on which they are negotiated are a matter for those two bodies which will be negotiating. They are not a matter for me.

Mr. Blyton: Is the right hon. Gentleman aware that we recognise that the small mine owners have to suffer from the changing pattern of consumption in the coal industry in the same way as we have in the National Coal Board? As we have to face 242 closures, if private mine owners do not take their share of this burden it will mean further closures in the big collieries and mines.

Mr. Wood: The hon. Gentleman's remarks will certainly be noted.

Mr. Lee: Will not the right hon. Gentleman agree that it may not even be a question of small mines closing? Is it not a fact that the Board has had a huge job to do of stocking coal and it might be suggested that the small owners should do a share of the stocking as well? If there is any question of unemployment among people working in the small mines, certainly in many instances the Board would be prepared to employ them.

Mr. Wood: I think the House will agree that these negotiations are more likely to be successful if I do not comment further at the present time.

Smokeless Fuels (Supplies)

Mr. Ellis Smith: asked the Minis-tea- of Power whether adequate supplies of smokeless fuel now exist to enable the provisions of the Clean Air Act to be complied with.

The Parliamentary Secretary to the Ministry of Power (Mr. J. C. George): I would refer the hon. Member to the first part of the reply which I gave to the hon. Member for Bilston (Mr. R. Edwards) on 23rd March.

Mr. Ellis Smith: We are constantly receiving replies of that character. While I am not doubting the validity of the Answer just given, may I ask the Parliamentary Secretary whether he is aware that in the localities there are not adequate supplies? Is it not a fact that the National Coal Board has now been carrying out research and development on this for ten years? If so, has not the time arrived when there should be large-scale distribution?

Mr. George: I have no doubt that from time to time during the winter local shortages have taken place, but over the country as a whole supplies have been adequate over the past winter. With regard to the Board's experiments on smokeless fuels, they have reached a stage now When two pilot stations are being built, and the evidence is that in future they will make a large contribution towards the supply of smokeless fuels.

Mrs. Slater: Does the hon. Gentleman not agree that the setting up of these pilot plants is rather late in the day and should have taken place long ago? Is he aware that local authorities are constantly being pressed to schedule more clean air areas and they are handicapped every time by the fact that smokeless fuel just is not available?

Mr. George: Research can be a very laborious job and may extend over a long period. My right hon. Friend is satisfied that the Coal Board has pressed ahead as far as it can with research leading to the erection of new pilot plants. As for the latter part of the hon. Lady's supplementary question, no local authority has had an application for the establishment of a smokeless area turned down because of a shortage of smokeless fuel.

Oral Answers to Questions — MINISTRY OF POWER

Power Stations (Coal-Firing)

Mr. Fitch: asked the Minister of Power if a decision has yet been reached as to whether Littlebrook B and Bruns-

wick Wharf Power stations are to remain coal-fired.

Mr. Wood: Discussions are still going on.

Mr. Fitch: Is the Minister aware that any decision to change to oil-firing would cause the greatest dismay in the coal mining industry? In view of the amount of coal stocked, will he see that this does not happen?

Mr. Wood: I will bear in mind what the hon. Gentleman says. I do not think it would be right to comment in detail about the matter at present.

Mr. Lee: Would not the Minister agree that in discussion in the House he has intimated that the Electricity Authority wishes to get back to coal-firing in many of the stations which have been on oil? Here we have two stations which have never been off coal, as I understand it; certainly they are on coal now. Would it not be a most retrograde step if at this stage they went on to oil-firing?

Mr. Wood: I take note of the hon. Gentleman's remarks. I do not think he would expect me to comment at this moment.

Oral Answers to Questions — MINISTRY OF AVIATION

Air Traffic Control, Prestwick Airport

Mr. Rankin: asked the Minister of Aviation if he will inquire into the Air Traffic Control System at Prestwick Airport with regard to the hours worked by officers, in order to satisfy himself that the hours of watch are in keeping with conditions that will ensure maximum safety for aircraft using the airport.

The Parliamentary Secretary to the Ministry of Aviation (Mr. Geoffrey Rippon): No, Sir. My right hon. Friend is already satisfied that the hours worked by the officers in question are appropriate.

Mr. Rankin: Is the hon. Gentleman aware that in any three-day duty period these officers work sixteen hours out of the last twenty-four? In view of the fact that this work is done mostly at night, because of the movements at Prestwick,


does the hon. Gentleman consider that system consistent with air safety regulations as they ought to be worked?

Mr. Rippon: The average hours per week are 44 and the watch arrangements are those most acceptable not merely to the department but to the officers themselves.

Mr. Rankin: Does the Parliamentary Secretary realise that the Question which I put is framed on the objections which are felt and have been made by a very large section of the officers who are engaged in this work?

Mr. Rippon: There have been no representations against the present system. Some changes have been made after discussions with the officers concerned. Polls are fairly regularly taken and I really think that the hon. Member's allegations are not justified by the facts.

London Airport

Mr. Leather: asked the Minister of Aviation what percentage of landings and take-offs at London Airport deposited and picked up passengers direct from passenger exits, and therefore did not require omnibus transport to and from aeroplanes, for any recent period for which figures are available.

Mr. Rippon: In the first two weeks of August, 1959, which was a typically busy period, the percentage was 49·8 of all arriving passenger flights and 34·5 of all departing passenger flights. In the first two weeks of February, 1960, which was a typically quiet period, the percentages were 51·7 and 34·1, respectively. These figures relate only to the central terminal.

Mr. Leather: I thank my hon. Friend for these figures, but would he not agree that it is a needless irritant to passengers to be trundled on and off buses, particularly at the end of long journeys? As it appears to any fairly regular user of the airport, and as my hon. Friend's figures show, it happens far more often than not. Would my hon. Friend instruct the traffic control officers to consider the convenience of passengers in this respect?

Mr. Rippon: I assure my hon. Friend that every effort is made to utilise the inside stands. However, only nine of the 50 stands are within easy reach on foot and, as my hon. Friend probably knows,

it is internationally accepted that passengers are not expected to walk more than 1,000 feet.

Mr. Strauss: asked the Minister of Aviation what steps he proposes to take to relieve the congestion at times of high traffic density in the north and central terminals of London Airport.

The Minister of Aviation (Mr. Duncan Sandys): Congestion at the air station on the north side will be slightly relieved by the end of this month, when the customs hall is enlarged. There will be considerably more relief next year when the first part of the new air station in the centre is opened.
Plans are also being made to increase the number of passengers that can be handled by the existing central air station. It is hoped to complete this in time for the summer traffic next year.

Mr. Strauss: Shall we see soon the plans for the north terminal building, which will be of great importance and great interest to everyone concerned? They have not yet been published. As for the central premises, is the Minister aware that as about 50 per cent. of passengers now arrive in their own vehicles the congestion is getting very grave indeed at the offices where tickets are presented and examined and, even worse, that the size of the departure and arrival lounges is wholly inadequate when traffic density is very high? Does the right hon. Gentleman not agree that a major reconstruction of the air terminal is really essential if great frustration and delay are to be avoided?

Mr. Sandys: The building at the north terminal will not be rebuilt. There will be a new building at the centre to handle the traffic now being handled at the north terminal. I shall publish the plans and I shall give the Press access to a model very soon indeed. Very extensive additional car parking facilities will be provided in connection with the new building. I have already referred in my Answer to improvements in passenger-handling capacity at the existing central air station.

Mr. Strauss: The right hon. Gentleman said that there would be some improvement but what will the rearrangements be? Will there be an enlargement of the existing lounges, which are


so small, where people have to wait when they want to board a plane or when they arrive? Is the right hon. Gentleman going to do away with the huge area which is now not used for health inspection and also a great deal of the Customs offices which are not fully used?

Mr. Sandys: At the north terminal, which is the subject of the right hon. Gentleman's Question, there is really nothing much that can be done. It is a temporary building and the best thing is to press ahead with the new permanent building in the right place and not spend a lot of money in tinkering with the old temporary structure.

Mr. Strauss: But can we have some indication of what is to be done at the central terminal, which I specially mentioned?

Mr. Sandys: I said that there are plans to rearrange the internal layout as far as we can within the existing structure, and I hope that this will be completed in time to deal with peak traffic next year.

Prestwick Airport (Starter Equipment)

Mr. Rankin: asked the Minister of Aviation if he will speed up the acquisition of starter equipment for Prestwick Airport to ensure that it will be available for the large jet aircraft when they begin using the airport in June of this year.

Mr. Rippon: As my right hon. Friend told the House on 9th March, the ordering of this equipment was put in hand as soon as it was established that the operators wished it to be provided. I hope that it will be available by June, but we have arranged to hire an existing starter if it is not.

Mr. Rankin: I hope Chat that is welcome news, but is the hon. Gentleman aware that the operators have been rather alarmed at what would appear to be the slowness of the Ministry in dealing with this matter? In view of that, the operators tried to get starter gear themselves but found Chat they could not get it for eight months. Will the Minister be able to get it before that time?

Mr. Rippon: The only reason for the delay is that the airlines concerned failed to agree on terms for the provision of the starting service until late last month.

Aircraft Industry

Mr. Chetwynd: asked the Minister of Aviation what orders for military and civil aircraft he has placed with the two main groups of aircraft manufacturers; and what conditions have been made in respect of any development contracts made.

Mr. Grimond: asked the Minister of Aviation if he will make a further statement on the obligations which Her Majesty's Government are accepting or proposing to accept in regard to the merger of aircraft construction firms, and the amount of public money involved.

Mr. Sandys: I have had several meetings with these groups. I have told them what projects or types of project would, in my opinion, justify Government support and the terms on which I would be prepared to make it available. The firms concerned are now studying the matter and I hope to receive their proposals shortly. I will make a further statement in due course.

Mr. Chetwynd: Has the Minister given further consideration to issuing a White Paper setting out these proposals and the terms on which the Government will accept them? Can he say when this large carrot of Government aid, which has been dangling before the industry for so long, will become a reality?

Mr. Sandys: Well, the industry is sniffing the carrot at the moment and I am waiting to get its reactions. As for a White Paper, perhaps the hon. Member will await a further statement which I shall make and then see whether he thinks that there is sufficient additional information to justify a White Paper. I rather doubt whether there will be.

Mr. Grimond: I am grateful to the right hon. Gentleman for saying that he will consider issuing a White Paper, but is he aware that the Leader of the House has promised in the case of the steel industry that before final agreements are reached on any question of further aid


an opportunity will be allowed to the House to discuss them? Will the right hon. Gentleman consult the Leader of the House on whether similar arrangements could be made in connection with the aircraft industry?

Mr. Sandys: I am always in close touch with my right hon. Friend.

I.A.T.A. Conference, Paris

Mr. Chetwynd: asked the Minister of Aviation whether he will make a statement on the recent International Air Transport Association Conference in Paris.

Mr. Sandys: Yes, Sir. I expect to be ready to make a statement next week.

Mr. Chetwynd: Will the statement include the international fares as well as the cabotage route fares?

Mr. Sandys: Yes, Sir.

Night Flights, London (Jet Aircraft)

Mr. A. Royle: asked the Minister of Aviation when he expects to reach a decision on the application from British European Airways Corporation for permission to operate services at night with Comet 4B aircraft from London Airport.

Mr. Sandys: I have authorised British European Airways to operate a small number of night services with Comet 4B aircraft at London Airport, subject to the condition that the noise level shall not exceed that of piston-engined aircraft which are already permitted to fly at night without restriction. The noise tests which have been carried out in the last few weeks show that this is technically practicable.

Mr. Royle: Is my right hon. Friend aware that, in spite of the precautions he has taken, his statement will be received with concern by many people living under the glide path to London Airport? If those precautions are not successful in reducing the noise of jet aircraft to the level of that of piston-engined aircraft, would my right hon. Friend reconsider his decision, and is he considering extending this permission to other airlines?

Mr. Sandys: I can assure my hon. Friend that I shall keep a close check on these flights to assure myself that the

conditions are being observed. So far I have not received any applications from other airlines.

Mr. Hunter: Can the Minister please inform me of the dates when the noise tests were held, where, and also the details of the test readings?

Mr. Sandys: Without notice, I could not do so.

Mr. Hunter: Will the right hon. Gentleman be able to send that information to me?

Mr. Sandys: I will send the hon. Gentleman the information.

Mr. Lipton: Is the right hon. Gentleman aware that the only noise test in which I am interested is whether or not these Comets flying at night will wake me up? May I ask him to believe that if they do wake me up at night he will hear more about it?

Mr. Sandys: It depends on how soundly the hon. Gentleman sleeps.

Mr. R. Harris: Can the Minister say which runway will be used, as this will decide which inhabitants in Middlesex will be affected?

Mr. Sandys: Not without notice.

Mr. Rankin: If one B.E.A. Comet is causing all this trouble by taking off at London Airport, why is the right hon. Gentleman proposing to increase the number of independent operators and thereby, perhaps, increase the number of Comets?

Mr. Sandys: In order to develop the strength and prosperity of British aviation.

Oral Answers to Questions — MINISTRY OF HEALTH

Railway Compartments (Heating)

Dr. A. Thompson: asked the Minister of Health if he will consult the British Transport Commission regarding the harmful effect of overheated compartments in diesel trains on the health of passengers with chest complaints.

The Minister of Health (Mr. Derek Walker-Smith): I am informed by my right hon. Friend the Minister of Transport that the heating of railway compartments is a matter of day-to-day


administration which falls entirely within the responsibility of the British Transport Commission, but I am sure that the Commission will take due note of what the hon. Member has said.

Dr. Thompson: In view of the large incidence of bronchitis and chest complaints in this country, will the Minister, perhaps in conjunction with the Secretary of State for Scotland, bear in mind the fact that the contrast in temperature when stepping from cold platforms into extremely overheated trains can cause severe distress to this kind of patient, and that although the distress may not be permanent, and may not have permanent effects, it can in the short term be very distressing?
If the Minister is in doubt, may I suggest that he accompanies me one day on the 1.5 diesel train from Waverley Station to my constituency? I assure him that by the time we have got over the Forth Bridge the desperate overheating in the diesel compartment will have reduced him to the state of a limp rag.

Mr. Walker-Smith: I think I must resist the temptation, attractive as it is, to make the journey in company with the hon. Gentleman and must seek his company on some other and more convenient occasion. I am sure, however, that the Commission will have all these points in mind.

Dental Staff, Dagenham

Mr. Parker: asked the Minister of Health whether he is aware of the shortage of dental staff in Dagenham; and whether he will take steps to improve the position.

The Parliamentary Secretary to the Ministry of Health (Miss Edith Pitt): I am aware of the shortage of dental staff in Dagenham, which is part of a general problem affecting the country as a whole. Measures have been taken to implement all the main recommendations of the McNair Committee on Recruitment to the Dental Profession. My right hon. and learned Friend gave details of the Government's plans to expand training facilities in reply to a Question on 16th November last. Arrangements are also in hand for the training of dental ancillaries who will undertake some of the simpler dental operations, thus relieving the burden on dentists, especially in the local authority service.

Dr. Summerskill: Can the hon. Lady say how far short the training facilities are of the McNair recommendations?

Miss Pitt: I cannot say how far short they are, but my right hon. and learned Friend has explained to the House on previous occasions the developments which are taking place and the extra training places which are being provided. I think he also told the House that there is no shortage of recruits and that all existing places are filled.

World Health Organisation (Malaria Eradication)

Mr. Pavitt: asked the Minister of Health what reply was given by Her Majesty's Government to the request of the World Health Organisation for a contribution to its Special Malaria Eradication Fund.

Mr. Walker-Smith: Her Majesty's Government regretted that they did not feel able to make any further contribution to malaria eradication work additional to that which they already make by way of their contributions to the regular budgets of the World Health Organisation and to the United Nations Children's Fund and the Expanded Programme of Technical Assistance, as well as by way of the anti-malaria work undertaken in Her Majesty's territories overseas.

Mr. Pavitt: Whilst appreciating the Minister's regret, in view of the fact that there are some 250 million potential victims of malaria, will he think further on the question of responding to this special appeal?

Mr. Walker-Smith: We do not think that voluntary special ad hoc funds are a sound way of financing continuing programmes of international organisations which have a regular budget. We feel that such actvities should be part of a co-ordinated programme within a regular budget drawn up with predetermined priorities.

Mr. Pavitt: asked the Minister of Health if he will propose at the next meeting of the World Health Organisation that all member States be asked to increase their contributions to the organisation in order to enable it to meet the cost of a special campaign to eradicate malaria.

Mr. Walker-Smith: No, Sir. I do not think that it would be appropriate to put forward such a proposal.

Mr. Pavitt: Will the Minister bear in mind that America is already contributing very well to the fund, and that if he cannot see his way clear to supporting the ad hoc fund, it would at least do something towards solving this terrific problem if Her Majesty's Government would consider raising an amount in the same proportion as that paid by America?

Mr. Walker-Smith: We have substantially increased our contribution to the World Health Organisation annual budget over the years. In fact, we are the third largest contributor to it. That budget has itself doubled over the last six years, and there is a further increase in the budget for 1961 of nearly 10 per cent.

Dr. Summerskill: How can the Minister justify not giving one penny to the Malaria Eradication Fund, in view of the fact that many of the countries for which we are responsible have a very high mortality and morbidity rate for malaria?

Mr. Walker-Smith: I answered the first part of the right hon. Lady's supplementary question when I told the House what was the view of Her Majesty's Government on the way in which this kind of work should be financed within the context of the responsibility of the World Health Organisation. As regards overseas territories, we contribute substantial sums towards anti-malarial work by way of grants under the Colonial Development and Welfare Acts.

Public Service Vehicles (Smoking)

Dr. A. Thompson: asked the Minister of Health if he will consult the Minister of Transport with a view to securing nation-wide acceptance of the principle that access to the lower decks of public service vehicles shall be restricted to non-smokers in order to protect passengers, particularly older ones, suffering from chest complaints from the distress that may be caused by excessively smoky atmospheres.

Mr. Walker-Smith: I understand that the principle to which the hon. Member refers is widely applied in practice. Bus operators naturally wish to satisfy their passengers, and my right hon. Friend

and I think it best to leave it to them and to the Traffic Commissioners to decide according to local circumstances.

Dr. Thompson: While admitting the undoubted talent of the Minister of Transport, may I ask the Minister what special medical knowledge he has applied to the case wherein he more or less stated that the inhabitants of Durham who suffer from chest complaints are peculiarly immune to the effects of polluted atmosphere? Will he bear in mind the fact that what is required, and what has been asked for by the County Councils Association in a memorandum to the two Ministers concerned, is the introduction throughout the country of the prohibition of smoking on the lower decks of double-deck vehicles, thereby dispensing with the necessity to prove the need for such a requirement on the occasion of every application for a licence?

Mr. Walker-Smith: In answer to the first part of the hon. Gentleman's supplementary question, I understand that my right hon. Friend allowed an appeal in the Durham case solely in view of the individual circumstances of that particular case. He accepted that, in principle, a ban on smoking could, quite probably, be made a condition of the granting of a road service licence by the Traffic Commissioners. On the second part of the hon. Gentleman's question, I am aware of the county councils' recommendation to my right hon. Friend, and I will certainly give it due consideration.

Mr. Marquand: Is the Minister aware that the hon. Member for Bishop Auckland (Mr. Boyden) and myself have made representations to his right hon. Friend the Minister of Transport about this matter and have requested an interview? Will he in the meantime consult his right hon. Friend and explain to him the importance of preventing women, children and other people being subjected to smoking on the lower decks of buses?

Mr. Walker-Smith: I am sure that my right hon. Friend is generally aware of all the broad considerations which arise in this matter.

Spectacles

Commander Pursey: asked the Minister of Health what action he will take to ensure that all opticians provide


proper and detailed receipts, on the official Forms O.S.C.15 and H.E.S.2., for all payments received from patients under the National Health Service, and that National Health Service forms are not used for private transactions in frames or lenses, and so mislead patients that these are National Health Service payments, when they are not.

Miss Pitt: Opticians providing supplementary ophthalmic services were reminded by a circular in November last that Form O.S.C. 15 should be issued in receipt for payments made under the Service but should not be used for private transactions. My right hon. and learned Friend will take a convenient opportunity of bringing the same point to their notice in respect of Form H.E.S.2.

Commander Pursey: Is the Minister aware that a large number of opticians do not give any receipts for National Health Service payments at all, and that others give receipts for professional services only, with no details? Is he aware that, as a result of this, prescriptions for lenses and other claims for payment from the National Health Service cannot be compared with receipts, and that there is no check on the work actually done by the opticians?

Miss Pitt: It is part of the opticians' terms of service under the supplementary ophthalmic service that they should supply a receipt for payments under the regulations for the supply of glasses. If the hon. Gentleman has any particular cases in mind where this has not been done, I would refer him to the advice given in an earlier debate to put them up to the executive council.

Dr. Summerskill: Can the hon. Lady say whether there is any system of checking similar to that used in regard to the supervision of prescribing by chemists?

Miss Pitt: All prescriptions are sent to the executive council, and have to be authorised by it before, in fact, the spectacles can be supplied.

Commander Pursey: asked the Minister of Health if he will state the usual life of National Health Service spectacle lenses and frames, respectively; and whether there is a defined period after which spectacles can be replaced for the standard price of £1 10s. 3d.

Miss Pitt: Lenses should normally last until there is a change of prescription. Frames should with reasonable care last longer. Further glasses at the standard National Health Service charge may be obtained at any time, if there is a change of prescription following a sight test.

Commander Pursey: Is the position that, if there is a change in the prescription after two years, new spectacles can be obtained for £1 10s. 3d., but if an old-age pensioner's eyes have not changed after five years but his lenses are chipped and his frames damaged by ordinary usage, he has to pay for replacements and repairs or the full price for a new pair of spectacles? What is the period after which a new pair of spectacles will be provided as the result of fair wear and tear?

Miss Pitt: The period varies with the individual. For example, some patients need changes of lenses more frequently, and children outgrow their frames. On the average, I am advised, there is a change of prescription after about four years under the supplementary ophthalmic service, and patients may apply at any time for a further sight test.

Mr. Hendry: Is my hon. Friend aware I got a new pair of spectacles last week after less than two years?

Oral Answers to Questions — MEDICAL RESEARCH

Radioactivity

Mr. Frank Allaun: asked the Minister of Health, as representing the Minister for Science, in view of the fact that radioactivity in the air in Belgium was twenty-five times the normal on 29th February, 16 days after the Sahara test atomic explosion, and that rainfall on that day was 600 times more radioactive than normal, what comparable increase has been recorded in Great Britain since that date.

Mr. Walker-Smith: Fission-products believed to be due to the French atomic explosion were detected in air in the United Kingdom in the period 27th February to 1st March and in rain on 29th February. The total radioactivity from fission-products during this period of four days reached about twice that still being recorded from earlier nuclear explosions but was less than one per


cent. of the normal amount of naturally-occurring radioactivity in air. The total radioactivity from fission-products in rain on 29th February was about twice that from fission-products present on the average from earlier nuclear tests, but less than a tenth of the total a year ago.

Mr. Allaun: Whilst thanking the Minister for that answer, which explains why on 29th February he told me that there had been no increase in fall-out, and in view of this reply, would he consult his right hon. and learned Friend the Foreign Secretary and discuss with him the possibility of urging France not to proceed with her second and larger test which is now due?

Mr. Walker-Smith: That is a matter for my right hon. and learned Friend the Foreign Secretary. Of course, the hon. Gentleman and the House will have in mind that the small increase in radioactivity over the short period to which I have referred—arising after my last answer to the House, as the hon. Gentleman was good enough to say—was due mostly to short-lived radioactivity, and only very small amounts of the long. lived isotopes, such as strontium 90 and cæsium 137, were present.

Strontium 90

Mr. Frank Allaun: asked the Minister of Health, as representing the Minister for Science, if he will make a statement on the latest Harwell report showing the approximate doubling, within six months, of the strontium 90 found in British children's bones.

Mrs. Butler: asked the Minister of Health, as representing the Minister for Science, what consideration he has given to the official report of Harwell scientists showing an increase of strontium units, per gram of calcium, in the bones of children under five years of age from 1·5 in the latter part of 1958 to 2·8 in the first half of 1959; and whether he will make a statement.

Lord Balniel: asked the Minister of Health, as representing the Minister for Science, whether he is aware that the average proportion of radioactive strontium 90 in the bones of stillborn babies and young children in Great Britain in the period January to June, 1959. compared with March to

December, 1958, has increased by about 60 per cent.; what consideration he has given to the consequences of this increase; and if he will make a statement.

Mr. Mason: asked the Minister of Health, as representing the Minister for Science, whether his attention has been drawn to the recent report made public by the Atomic Energy Authority which shows a marked increase in strontium 90 found in young children's bones; and whether he will now request the Medical Research Council to undertake an immediate review of the effects of this increased rate of deposition of fall-out.

Mr. Walker-Smith: My noble Friend and I have seen the report. The increases to which the hon. Members refer reflect the increased rate of fall-out deposition in the six months following heavy nuclear weapon testing in northern latitudes in 1958. There have been no test explosions other than the recent French test since November, 1958, and levels of fall-out in this country have fallen substantially since June, 1959. As I informed the House on the 18th February, the Medical Research Council has kept the matter under constant review and is preparing a further Report on the Hazards to Man of Nuclear and Allied Radiations which will provide a comprehensive assessment of the significance of all the available evidence.

Mr. Allaun: Is not the increase likely to continue, particularly in children born after June, 1959? Secondly, is it possible that some scientists may be mistaken about the safe level or the danger level, just as they were about X-rays?

Mr. Walker-Smith: On the first part of the hon. Gentleman's supplementary question, provided that no further quantities are injected into the stratosphere, it is unlikely that the level of strontium 90 in children's bones will rise much above its present level, and subsequently it will probably fall. In that context, the hon. Gentleman will have in mind the answer which I gave to the House in reply to a question by the hon. Lady the Member for Wood Green (Mrs. Butler) on 22nd March.
The reply to the second part of the supplementary question is "No"—no mistake. The hon. Gentleman will appreciate that this is a field in which


knowledge is fast developing, and, therefore, we look forward to a new assessment by the Medical Research Council, to which I have already referred, to bring the assessment up-to-date.

Mrs. Butler: While recognising the Minister's limited responsibility in this sphere, may I ask him, as the Minister responsible for the health of the nation, to consider sending a cable today to his right hon. Friend the Prime Minister at Camp David reminding him of these figures and of the fact that failure to reach agreement between America, this country and Russia on nuclear tests will be at the expense of these babies and very tiny children?

Mr. Walker-Smith: As the hon. Lady knows, my right hon. Friend the Prime Minister has a very close knowledge of this subject and keeps it under constant review. I am sure that he has all the relevant considerations very closely in mind.

Lord Balniel: Does not my right hon. and learned Friend agree that this very steep increase will cause a fair amount of public concern? Will he urge on the Medical Research Council the importance of this subject and the urgency of completing its inquiry and making it publicly available?

Mr. Walker-Smith: I said on 18th February that the Medical Research Council is engaged in its revised assessment and that it will be published as a White Paper.

Mr. Mason: Is the Minister not aware that the estimates of fall-out and its effects have been wrong on four occasions? First, it was found that some countries were being affected more than others. Secondly, we thought that there was a stratospheric reservoir of strontium 90 seeping slowly to earth but it was then found from the Prime Minister's statement that it was coming down in the rainfall far more quickly than we expected. Two weeks ago in Nature a statement was made that it is coming down far faster than even the Prime Minister revealed.
Now we have the latest and very disturbing report that the strontium 90 uptake in children's bones is far greater than we expected. This is a matter of

urgency, and the Medical Research Council ought now to be considering a fresh threshold level. Is it not the case that all strontium 90 is dangerous, particularly for young children?

Mr. Walker-Smith: The levels will be reviewed by the Medical Research Council in the context of its assessment of all the evidence available since 1956, which it is taking into consideration in the compilation of the White Paper to which I have referred. The Council will, of course, complete the White Paper as quickly as is possible, compatible with making a thorough, detailed and satisfactory assessment of a very difficult and technical subject.

Dr. Summerskill: The Minister seeks to reassure the House, but has he forgotten that the Scientific Committee of the United Nations stated that there was no threshold dose in genetic effects?

Mr. Walker-Smith: I have all these considerations in mind, but for the up-to-date scientific assessment as we see it in this country we must await the report of the Medical Research Council. It would be wrong of me to anticipate by piecemeal observations what will be included in a general and authoritative survey by the Council.

Oral Answers to Questions — HOSPITALS

Juvenile Courts, Sheffield

Dr. D. Johnson: asked the Minister of Health whether, in view of the breach of the long-established precedent that parents should be responsible for their children in all decisions concerning medical treatment which is involved in the action of the Sheffield Regional Board in establishing special juvenile courts in hospitals with powers to transfer responsibility to local authorities if parents refuse permission for an operation on a child, he will request the Board to postpone invitations to magistrates to set up such courts until the matter has been discussed on a national basis; and whether he will issue a White Paper with a view to promoting such discussion.

Mr. Walker-Smith: Whether the provisions of the Children and Young Persons Act, 1933, would apply to a case of this


kind, and what would be the effect of any order made under them, are questions of law on which it would not be appropriate for me to express any opinion. Accordingly, I would not feel justified in intervening, and see no reason to issue a White Paper on the subject.

Mr. Johnson: May I ask my right hon. and learned Friend, however, what advice he has given to this regional hospital board in regard to Section 102 (1) of this Act, whereby parents are allowed. an appeal to quarter sessions in a case such as this, and whether or not, in his opinion, that does not completely invalidate the procedure the board project in these circumstances, and, accordingly, indicate that fresh amending legislation, or legislation, is necessary for anything of this nature?

Mr. Walker-Smith: No. I am sure that the: regional hospital board is aware of the provisions of Section 102 in regard to appeals. The regional hospital Board is not seeking the use of any new powers in this context but merely trying to ensure that where the existing procedure is applicable it should operate speedily.

UNION OF SOUTH AFRICA(SECURITY COUNCIL MEETING)

Mr. Callaghan: Mr. Callaghan (by Private Notice) asked the Secretary of State for Foreign Affairs whether he will instruct the United Kingdom delegate on the Security Council, for the debate which is to take place on Wednesday, 30th March, to support proposals for bringing the South African situation within its jurisdiction?

The Secretary of State for Foreign Affairs (Mr. Selwyn Lloyd): Instructions to the United Kingdom delegation are under consideration. It is not yet known what form the discussion will take or what resolution or resolutions, if any, will be put before the Council. As the House is now aware, the Security Council meeting has been postponed from Tuesday until Wednesday. The matter which will arise at the first meeting will be the adoption of an item for the agenda. It is not yet certain how the item will be defined. If, however, the hon. Member for Cardiff, South-East (Mr. Callaghan) will put down a Question to me with regard to that point for

Wednesday, I will try to give him an answer.

Mr. Callaghan: Is the Foreign Secretary aware that on the last occasion on which this matter was considered we found ourselves in the company of only two other States, against 66 members of the United Nations, supporting South Africa on this issue? Is he aware that we are anxious, for our country's reputation, that we shall not be placed in this position again?
May I ask the right hon. and learned Gentleman whether it is not possible for him to give us an answer tomorrow to a simple question? Under Article 34 a situation which may give rise to international friction can be inscribed on the agenda with seven affirmative votes. Is it not possible for him at least to tell us tomorrow that Her Majesty's Government do not propose to vote against inscribing it on the agenda when a request has already been made for that by a number of independent African States?

Mr. Lloyd: I am fully aware of the deep feelings of the House on this matter. The Opposition are not alone in deeply regretting the loss of life in this tragic incident. The hon. Member asked me several questions. This matter has not been considered before by the Security Council. We must have some knowledge of how the item is to be framed and, later, what the resolution is likely to be, before we pronounce upon what our attitude will be, either to the item or to the resolution. I assure the hon. Member, and right hon. Members and hon. Members on both sides of the House, that we have very much in mind the feeling on these matters.

Mr. Callaghan: While we are glad to hear that advance made by the Foreign Secretary, may I put this question to him: is it not clear that the situation in South Africa has now reached a stage at which it will be in the interests of all, both the Europeans and the Africans living there, that the United Nations should take cognisance of it? While we do not ask him to bind himself in advance to accept anything which might appear on the agenda, because none of us knows what that might be, can he not tell us now that a simple discussion


of this matter, which can arise under Article 34 of the Charter, would not be opposed by the British Government?

Mr. Lloyd: I do not want any inference to be drawn from my answer to this, but we must know with some particularity the nature of the item and the nature of the discussion. The hon. Member asked whether we will
support proposals for bringing the South African situation within its jurisdiction.
We cannot alter the Charter of the United Nations. There it is. Its rules have to be applied. All I can tell the hon. Member, with complete sincerity, is that we will bear in mind the very deep feelings on this matter.

Mr. Grimond: Will the Foreign Secretary bear in mind that, whatever the form of this proposal, the substance of it will be taken as a proposal that the expression of world opinion on events in South Africa is overdue? Will he also bear in mind that it is very desirable, for the South Africans themselves, that this country should maintain its clear attitude that what has been done in South Africa is abhorrent to all parties in this country? Any repudiation of this, or what might seem to be repudiation, will be quite inconsistent with the Prime Minister's speech in South Africa.

Mr. Lloyd: However that may be, I do not think it reasonable to expect us to define beforehand our attitude to a hypothetical item and a hypothetical discussion. If I may, I will repeat what I said last September in the general debate at the United Nations on these matters. It is still the Government's position. I said:
In those territories where different races or tribes live side by side, the task is to ensure that all the people may enjoy security and freedom and the chance to contribute as individuals to the progress and well-being of these countries. We reject the idea of any inherent superiority of one race over another. Our policy, therefore, is non-racial; it offers a future in which Africans, Europeans, Asians, the peoples of the Pacific and others with whom we are concerned, will all play their full part as citizens in the countries where they live, and in which feelings of race will be submerged in loyalty to new nations.
That is the position which I set out last September and that is our approach to these matters.

Mr. Ronald Bell: Will my right hon. and learned Friend give an assurance that this country will not countenance any disorderly debate in the United Nations? Will he remember that this institution was established to uphold the rule of law and that it is indeed sad that it should set such a bad example by ignoring its own constitution? Will he further say that whether the matter falls within the domestic jurisdiction of a member State cannot and must not depend on how strongly some people outside happen to feel about it?

Mr. Lloyd: I quite agree that we must have some regard to the rules of procedure and the terms of the Charter in discussing these matters. But I think that we are all conscious of the deep feelings which are held on all sides about this matter, and in that spirit we will approach this debate.

Mr. Foot: Have the Government considered the terms of the resolution passed last week by the Afro-Asian group of nations stating that immediate consideration by the United Nations of the situation in the Union of South Africa is imperative if the Continent of Africa and, indeed, the whole world is to be saved from a conflagration which might seriously threaten the peace of the world? Can the Foreign Secretary say whether the Government are generally in sympathy with that resolution?

Mr. Lloyd: That is one of the difficulties. That resolution is quite different from the terms of the letter which has been addressed to the Security Council asking for this debate.

Mr. Biggs-Davison: Would my right hon. and learned Friend consider whether it might perhaps be likely to lead to a happier result for all the people concerned if questions of this kind were discussed at a Commonwealth conference rather than at the United Nations?

Mr. Lloyd: That certainly is a consideration.

Mr. Swingler: Why cannot the right hon. and learned Gentleman say that the Government recognise that the tragic events in South Africa have an international significance and international repercussions, and that, therefore, without prejudice to his views about any


resolution put forward, the Government would actually welcome a discussion of the events and the policies which have provoked them in order to make clear what is world opinion on the matter?

Mr. Lloyd: I have had very considerable experience both at the Security Council and at the United Nations. These matters really have to be dealt with in accordance with the procedures there, just as we have to work here according to our procedures. We have to see the nature of the item before we can decide beforehand what our reactions are to be.

Mrs. Castle: If the Foreign Secretary is uneasy about the form which the other countries' proposals might take, why do not the Government themselves take the initiative in tabling this as an item on the agenda in the form which they believe to be appropriate?

Mr. Lloyd: I can assure the hon. Lady that I am not uneasy, but in this case the request for a discussion has been received from the Afro-Asian Group, and we had much better deal with it on that basis.

Mr. Gaitskell: Since the Foreign Secretary is unable to give us a definite answer today, but has said that he might do so on Wednesday, will he undertake to make a statement on Wednesday in case Foreign Office Questions are not reached?

Mr. Lloyd: I will certainly give an undertaking that I will answer a Question with regard to how we are dealing with the item on the agenda on Wednesday.

Several Hon. Members rose—

Mr. Speaker: Order. We cannot debate this now.

Orders of the Day — IRON AND STEEL (FINANCIAL PROVISIONS) BILL

Order for Third Reading read.

3.45 p.m.

Mr. Ellis Smith: On a point of order, Mr. Speaker. During the Committee stage some of us raised several points which received widespread support. We were rightly—[Interruption.]—

Mr. Speaker: I would be obliged if hon. Members would recede a little more quietly. I have difficulty in hearing what the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) is saying.

Mr. Ellis Smith: During the Committee stage of the Bill, some of us raised several issues which, on reflection, the various occupants of the Chair advised us were a matter not for the Committee, but for you, Mr. Speaker. It was that fact, my study of procedure this weekend, my knowledge of Parliamentary practice, and my opportunity of seeing a letter prepared by you, Mr. Speaker, which reinforced my claim on this point of order.
In my view, this Bill is not in harmony with established Parliamentary practice. It is not consistent with precedents in Erskine May on the Consolidated Fund or the Appropriation Acts. As I said, several times we tried to raise this during the Committee stage. We were stopped—and I am not complaining about that—by the Chair because it was a matter for you, Mr. Speaker. We accepted that Ruling and now I am raising it with you.
It was traditionally established, at great cost to those whom we represent, that before we vote Supply the people's grievances shall be remedied, or at least ventilated, in this House. In my view, that is at stake in the Bill now before us and I will produce, in as few words as possible—

Mr. Speaker: If I understand the hon. Member aright—and I hope that he will tell me if I do not, but I am hoping to save time—I would have thought that he could ventilate on the Question shortly to be before the House—namely, the Third Reading of this Bill—precisely


all that he wants to say. if I understand it correctly, what the Government are saying about the Bill in that it is in order that these particular loans should be registered, as it were, below the line, instead of above the line, with the result that the House will not have an annual occasion of looking at these proposed expenditures. That is what I understand the right hon. Gentleman the Minister of Power to say about it.
On the points which otherwise arise— really rather irrelevant now—that is, whether it would have been possible to discuss these loans on the Consolidated Fund Bill, it is because we have a Bill of this kind, which makes specific authority for this kind of loan, that that matter may have been left out of the issues authorised by the Consolidated Fund Bill. It is for that reason, the Consolidated Fund Bill being a different matter, that my deputy was compelled to rule that the financing of particular nationalised industries could not be discussed on that Bill. I take it that the essential issue which the hon. Member wishes to raise can be discussed during the course of the Third Reading of this Bill.

Mr. Ellis Smith: Thank you for that advice, Mr. Speaker, but I have made a careful study of the whole of the OFFICIAL REPORT about this. I have in mind an undertaking given by the right hon. Gentleman the Leader of the House, for whom I have very much personal respect. I remember that he said it was the practice to "let things go," with an undertaking to see how they went.
There is too much at stake in this. This is a matter for you, Mr. Speaker. It is not a matter for the Government. It is a matter for the Speaker of the House. Therefore, while I acknowledge the advice that you have given me, I wish to draw upon my Parliamentary rights to raise the point of order.
I can understand the Civil List and the requirements of the Royal Family, the judges and others, and Mr. Speaker's salary, being dealt with in this way, because they are above the political battle. However, this matter is not. This is an acute political question and there is very much at stake. Because of the importance of the matter, we have to ask for Mr. Speaker's support.
In my view, it should be in order, on Consolidated Fund Bill, to raise issues arising out of loans made from the Consolidated Fund, because drafts made upon the Consolidated Fund are a permanent charge. I should make it clear that I would have consulted you, Mr. Speaker, about this matter earlier if I had had the opportunity to do so, because I believe that it is only playing the game to warn people of one's intentions. But, first, my train was late and, secondly, I knew that you would be well-informed about what had happened, as was evidenced by the letter which you sent to the hon. Member for Kidderminster (Mr. Nabarro).
However, with the greatest respect, Sir, I have to tell you that I do not accept the validity of some of the points which you made in that letter and which I will mention later.

Mr. Speaker: I very much enjoy listening to the hon. Member at all times, but he will be the first to understand that I must try to protect the interests of other hon. Members as well. Can he put in precise form what exactly is suggested to be his point of order, when I will do my best to rule upon it? I am afraid that I must restrict him a little.

Mr. Ellis Smith: I have two final points to make, Sir. You will appreciate that my vocabulary has been developed differently from yours and it may be that the charge of not being precise may sometimes be laid at my door.
My first point concerns the rights of hon. Members to raise questions on the Consolidated Fund Bill.

Mr. Speaker: My difficulty, as I am sure the hon. Member will see, is that any questions which arise on the Third Reading of this Bill can properly be raised, but not questions relating to the Consolidated Fund Bill as though that were a general discussion on the Consolidated Fund, which it is not. That is not the problem before the House. If there is a point of order which arises on the Question now before the House, I should be glad to hear it, but I want to know what it is.

Mr. Ellis Smith: The difficulty is that we want to know where we are before we agree to the Third Reading of this Bill. If we agree to it, it may mean


that the whole House will have accepted a position which will be prejudicial to our interests, whereas if the matter is raised now and we get an explanation from you and an undertaking from you, when we discuss the Third Reading, we will be able to frame our opposition differently. In your letter you said:
… the authority by which the Treasury issue out of the Consolidated Fund sums for the nationalised industries is the relevant provision in the Finance Act, 1956 …
I readily accept that, but my difference with you is that one of these loans is to go to an industry which is not nationalised but which is private and which may well be making private profit out of public money.

Mr. Gerald Nabarro: Hear, hear.

Mr. Ellis Smith: Thus, while what you said in your letter may be applicable to nationalised industries, it is not applicable in this case when a loan is being made to a private firm.

Mr. Nabarro: Hear, hear.

Mr. Speaker: I think that I can help the hon. Member. That was not the issue which arose. I do not want to discus:; what was really a Ruling given publicly by my deputy during the course of the Consolidated Fund Bill. The only reason why this matter comes near me is that the hon. Member for Kidderminster (Mr. Nabarro) desired to know whether I confirmed my deputy's Ruling and I said that I did. Indiscreetly, I went on to give some explanation of the principles which showed why that Ruling was right and it is to those that the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) is now referring.
I was discussing what could and could not be discussed on the Consolidated Fund Bill. What can be discussed on the Consolidated Fund Bill depends upon the issues which the Consolidated Fund Bill authorises. The point I was making in that context—whether the target be a nationalised industry or a non-nationalised industry has no bearing on the matter—was that where the issues in question were issues not authorised by the Consolidated Fund Bill, then matters relevant to those issues could not be discussed on the Consolidated Fund Bill. I am sure that the hon.

Member will be in firm agreement with that.

Mr. Nabarro: On a point of order. This is an entirely different point of order, Sir.

Mr. Speaker: I think that the hon. Member for Stoke-on-Trent, South had not finished.

Mr. Ellis Smith: Thank you, Sir. I was not trying to misinterpret your letter and I have not quoted more of it than I considered relevant. I thank you for allowing me to raise this matter, especially as I did not give you notice of it. I should be very glad to have your advice.

Mr. Speaker: If I rightly understood what the hon. Member has been putting to me, in accordance with the principles of my predecessors I decline to give a hypothetical ruling on a hypothetical situation which might arise on some other question which might arise in the future on some other proceedings. I must firmly decline to do that, since the House would otherwise get no guidance. However, on the Third Reading of this Bill the hon. Member is entitled to make every protest he likes about what the Bill does, which is the matter about which he desires to protest.

Mr. Nabarro: I apologise for delaying proceedings, Mr. Speaker, but what I have to say is in pursuit of your guidance on a very important matter which I believe to be of general interest to right hon. and hon. Gentlemen on both sides of the House.
The Iron and Steel (Financial Provisions) Bill deals with moneys which are to be below-the-line accounting and are to be derived from the Consolidated Fund. Do I understand your Ruling, in the terms you used to the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith), to be indicative of the fact that once these loans are enacted it will not be in order for them to be discussed on any future Consolidated Fund Bill? Is that the point which you have made? If so, that must colour our judgment of the Bill, for, if I have interpreted your Ruling correctly, it means that the whole of the amount provided by the Bill below the line will be an irrevocable act and that Parliament—only the House of Commons and not another place, in fact


—will have no jurisdiction whatever over the issue of these loans in forthcoming years and that we are dealing this afternoon with something which passes absolutely outside our control once this Third Reading is passed?
Is it your Ruling, Sir, that on future Consolidated Fund Bills it will be out of order to discuss these loans, notwithstanding the fact that the money for them comes from the Consolidated Fund?

Mr. Speaker: I have said that I decline to rule on a hypothetical future situation. What will be in order on a future Consolidated Fund Bill will be matters relating to the issues authorised by that Bill and if these loans are now coming into a below-the-line form as charges on the Consolidated Fund, they would not, of course, be authorised by any future Consolidated Fund Bill. That is the position.

Mr. Nabarro: May I press that matter with you, Mr. Speaker? Your Ruling, then, is quite explicit: once this Bill is through its Third Reading it is irrevocable and the House of Commons has no jurisdiction whatever—unless the Bill is repealed—in respect of these loans on any future Consolidated Fund Bill. That is contrary to the general understanding of the overwhelming majority of hon. Members, who have always taken the view that on the annual Consolidated Fund Bill it was perfectly in order to discuss any matter arising from sums derived directly or indirectly from the Consolidated Fund.

Mr. Speaker: That was the effect of the Ruling in relation to the Consolidated Fund Bill given publicly by my deputy. That is the only Ruling in this context. I think that if the hon. Member cares to look he will find that it has, on precedent, been ruled that charges on the Consolidated Fund cannot be discussed on the Consolidated Fund Bill. But I do not want to get into a hypothetical world. I have ruled on the position on this Bill, and the hon. Member has made his point clear.

Mr. Nabarro: Further to that point of order, Mr. Speaker. I am deeply grateful to you for this Ruling, which is illuminating to many of my hon. Friends and myself. I now beg to give notice

that at the outset of the proceedings on the Gas Bill, in Committee, and on Third Reading, I shall test precisely the same point, as the sums involved there within borrowing powers are again derived from the Consolidated Fund.

Mr. Speaker: We do not need notice from the hon. Member about what he will do on some other occasion. I hope that the House can now get on with this Bill if that matter is sufficiently concluded.

4.1 p.m.

The President of the Board of Trade (Mr. Reginald Maudling): I beg to move, That the Bill be now read the Third time.
The purpose of the Bill is a narrow one, though it has given rise to fairly extensive debate. Its purpose is solely to provide that the payments necessary to meet the contracts with Richard Thomas and Baldwins and the Colvilles should be provided below the line; in other words, that they should be charges on the Government for which it is proper to borrow.
I think that there has been some confusion about the purpose of the Bill. In Committee, the right hon. Member for Vauxhall (Mr. Strauss) said that this legislation was legislation confirming the agreements. It is nothing of the sort, because no such legislation was needed. The agreements were made by my right hon. Friend, or by my right hon. Friend's predecessor, under statutory powers already given by the House, and the details of the agreements were announced by myself and the then Parliamentary Secretary to the Ministry of Power, in full at the time.
At that time, apart from some questions from the right hon. Gentleman and one or two other hon. Members opposite there was no opposition to the making of these agreements. It was generally recognised that the agreements were sensible. No one claimed then that the projects themselves, the expansion of strip capacity, were wrong. I do not think that anyone could seriously have argued at the time that it would have been possible to finance expansion of this calibre from the private resources of the market.
That being so, it was clear that when these arrangements were made with


Richard Thomas and Baldwins and Colvilles the general expansion of strip capacity that is now taking place would not have gone ahead, and, in particular, the benefit to Scotland which we can foresee from the Colvilles expansion would not have taken place.

Mr. John Peyton: Does my right hon. Friend feel that Colvilles would not have undertaken this expansion and this enormous addition of strip capacity unless the agreement was made.?

Mr. Maudling: That is not the point. The point is what would have happened at the time the agreements were made.
I want to refer to the circumstances at the time, because there was then, as the House will recall, considerable discussion about the need for a fourth strip mill. There was no doubt about the need for one, but the argument was on the timing and the location. It was felt by the Iron and Steel Board that the need for a fourth strip mill was urgent and the Government supported that point of view.
We accepted the point of view that it was very urgent to get ahead with the provision of this new capacity, and everything that has happened since, and the rapidly rising demand for strip and sheet steel, has vindicated our judgment in the matter. It was clear at Chat time that this project should go ahead. It was equally clear at that time—and this was at the end of 1958, a year before the election—that sums of this magnitude could not have been found from the money market.
Anyone who studies the terms, the dates, and the amounts left with the underwriters of the last steel issues before that date will see that what I have said is uncontroverted. Our argument is that had the Government not agreed to provide this money these projects would have been seriously delayed, and that would have been a very bad thing for the industries of this country using sheet and strip mill products.
The second question was the location of this new output. All the technical considerations tended to point towards siting the whole project at Newport, but there were social considerations of another character, of the type we discussed

during the Local Employment Bill, now an Act, which pointed the other way, and particularly the needs of Scotland, which weighed very heavily with the Government at that time.
Clearly, there is a considerable need for new metal using industries in Scotland. The traditional heavy industries, shipbuilding and heavy engineering, are suffering great difficulties, and it is an urgent matter, if we can, to get more industries into Scotland to provide employment in metal using trades for the excellent labour force which at present is unemployed. It was felt at that time that there was a danger of a vicious circle, that industry would be attracted to Scotland by the provision of sheet steel manufactured in Scotland, but that until industry came, and until the demand was built up on the spot, no one would go ahead with the setting-up of a strip mill. Without a mill there would be no sheet metal industry, and without a sheet metal industry one would not get the mill.
The Government, therefore, thought it right to break the vicious circle by Government initiative leading to the establishment of substantial sheet capacity in Scotland. This was not a case of private enterprise coming to the Government and asking for help. In fact, the Government sought and received the cooperation of private enterprise on social grounds. The result has been a development in the steel industry which is of the greatest possible significance to the Scottish economy. It is most important that that should be emphasised.
The basis of it, financially, is precisely the same as the basis of our general distribution of industry policy, namely, the provision of Government assistance on terms very similar to those to enable private enterprise to undertake operations which are in the interests of the areas of the country where there is a very grave unemployment problem.
The results of these agreements, particularly the result of the Colvilles agreement, underlines all the work that we are trying to do to attract more employment into Scotland. If the Government had not entered into these agreements at that time, the effect on industry generally throughout the country, and in Scotland in particular, would have been very serious indeed.
That was the justification and, I suggest, the overwhelming justification, for the action taken at the time by the Government in making these two agreements with Richard Thomas and Baldwins and Colvilles.

Mr. Frederick Lee: Has the first tranche been paid yet?

Mr. Maudling: No, not yet. My right hon. Friend the Minister of Fuel and Power, who will answer the debate, will be in a position to answer these particular points. I have been trying to stress the general principles and motives of the Government in undertaking the agreements.
These agreements having been made, only two questions arise. First, should the agreements be amended? Secondly, what is the position about Parliamentary control of issues from the Exchequer? On the first point, these agreements were made by the Government in exercise of powers given to us by Parliament, and they were made by the two companies concerned in good faith. There can, therefore, be no question of a unilateral abrogation of the solemn agreements.

Mr. Nabarro: Nobody has ever suggested that.

Mr. Maudling: I am not saying that they have. I am trying to make the position clear, with my hon. Friend's permission.
In the case of Richard Thomas and Baldwins, there is little controversy, because, as has been made clear, the actual terms of the agreement are open to revision when the time comes for de-vesting the company. In the case of Colvilles, the company has said, and I think that the House is aware of it, that it will draw on the facilities given by the loan agreement as little as possible, but, clearly, the Government could not possibly deny the company the right to draw on those facilities to the extent of the agreement into which it had entered in good faith, and on the strength of which it has undertaken this very large project, which, I think everyone will agree, is in the interests of the nation generally and Scotland in particular.
On the question of Parliamentary control, I do not think that there is much disagreement with the proposition that

this sort of expenditure is more appropriate to below the line than above the line classification. Below the line items are generally those which are revenue-producing and which are repaid and, therefore, it is appropriate to borrow to finance them This applies to these loans. Of course, whether the payments appear above or below the line, the money will be paid over, as I must repeat, in pursuance of contracts made by the Government on the basis of powers granted to them by Parliament. That is a fact which Parliament would have to face in considering this expenditure in whatever place it appears in our national accounts.
It is appropriate that with a single undertaking of contract of this kind, Parliament should give approval of the money that is to be issued as a whole, in one operation, because it is one contract with Colvilles and one contract with Richard Thomas and Baldwins. That is precisely what the Bill does. It asks for the authority of the House for the provision of these moneys from the below the line expenditure.
The Bill puts a limit on the amount that can be issued. I am advised that it does not give any power to issue again money that may have been repaid. In any case, my right hon. Friend has assured the House that the money will be used only for these two contracts. As the House is aware, provision has been made for possible variations in the future as a result of any review of the position. Such a variation cannot involve increased public liability. My right hon. Friend has given clear undertakings to report to the House any variation and my right hon. Friend the Leader of the House has undertaken that any such report can be discussed, as can any of the annual reports that my right hon. Friend will be making.
To sum up, my case for the Bill is—

Mr. John Diamond: The right hon. Gentleman has just said that the annual reports which his right hon. Friend will be making can be discussed. Will he say on what occasions and explain how they will come up for discussion?

Mr. Maudling: I cannot say on what occasions, but I repeat the undertaking given by my right hon. Friend the Leader


of the House that he will make provision for such reports to be discussed if the House so desires. That is an undertaking which should be entirely satisfactory to the hon. Member.

Mr. Nabarro: I have been intimately concerned with the question raised by the hon. Member for Gloucester (Mr. Diamond). Does my right hon. Friend not recall that we have now had the Iron and Steel Holding and Realisation Agency with us for seven, possibly eight, completed financial years and that on no occasion has the House of Commons debated its report or been given any opportunity to question it other than by Parliamentary Question, nothwithstanding the fact there is now about £150 million involved in I.S.H.R.A. loans? Is it not likely that the loans under the Bill will suffer the same fate as I.S.H.R.A. concerning Parliamentary debate?

Mr. Maudling: I do not see any relevance in that interjection, unless it is to cast doubt upon the sincerity of my right hon. Friend the Leader of the House in giving his undertaking, which I now quote, that
if such a report is made in the first place by my right hon. Friend, or if such a report is made under Clause 1 (6) of the Bill, there shall be an opportunity given by the Government for discussion by the House."—[OFFICIAL REPORT, 22nd March, 1960; Vol. 620, c. 427.]
I hope that my hon. Friend will accept the undertaking of my right hon. Friend the Leader of the House in a matter of that kind.

Mr. George Lawson: The right hon. Gentleman has said that there will be opportunity to discuss such reports if the House wishes. Does this mean that the matter might come before the House if hon. Members request it? What will happen if other hon. Members oppose such a request and the matter is put to the vote? On that basis, an opportunity might not be given. Is the right hon. Gentleman giving an undertaking that if two or three hon. Members ask for a debate an opportunity will be given?

Mr. Maudling: I think that if there is a desire in the House for it to be discussed, it will certainly be brought to the notice of my right hon. Friend the Leader of the House. I do not see how any greater undertaking on this subject could possibly be given.
To sum up what I have been putting to the House as the arguments for the Bill, the first point is that these transactions were and are, without doubt, in the national interest. If the Government had not made these agreements at the time—I have not heard this point challenged—the provision of sheet steel for our sheet-using industries would have been badly delayed and, in particular, a development of great importance to Scotland would not have taken place. Therefore, these agreements at the time were wholly justified.

Mr. G. R. Mitchison: I remember distinctly, in the earlier discussion on the Bill, saying that the terms of the agreements might well have been varied. When the right hon. Gentleman says, "if these agreements had not been made", I cannot agree with him that there has been no protest. Had he said, "if some such agreements had not been made", that is another matter.

Mr. Maudling: On the detailed terms of the agreements, some questions were asked at the time, although if hon. Members opposite felt so strongly about them they should surely have put down a Motion disapproving of what we did. If these agreements, or some such agreements to provide this money from public funds had not been made, we should not have had these developments. That would have been contrary to the national interest.
Secondly, these agreements were entered into by the Government in the exercise of powers given to them by Parliament in the 1953 Act. Thirdly, in the arrangements that we are making in the Bill, there is full protection for the public purse and for the rights of Parliament.

Mr. Diamond: Oh.

Mr. Maudling: If the party opposite thinks that these agreements were so prejudicial to Parliament and to the public purse, why did it not put down a Motion at the time and say so? Why did not hon. Members opposite come along then, when the Government were committed? Now, all that we are doing is providing for the money in pursuance of solemn obligations made by the Government on Parliamentary authority, providing for where that money is coming


from. This is a late stage to raise these points.

Mr. Diamond: If the right hon. Gentleman considers it late, why did not he, on behalf of the Government, give the House an opportunity of discussing the matter then? Why did he not take the initiative and bring the matter to the House? Why does he think that £120 million should go "on the nod" without the House knowing anything about it for eighteen months?

Mr. Maudling: I gave full details of the agreements to the House at the time. Had Hon. Members opposite wished to challenge them, they had their normal constitutional means of doing so.
My case for the Bill is that the agreements were in the national interest. They were made in pursuance of powers given to the Government by this House, and the Bill and the method of providing the money are appropriate to this type of issue from the Exchequer and fully safeguard both the interest of the public purse and of the House. In these circumstances, I hope that the House will give the Bill a Third Reading.

4.18 p.m.

Mr. Frederick Lee: I asked the President of the Board of Trade a question just now about the payment of the moneys that we are discussing. He was good enough to inform the House that, as yet, no payment has been made. During the Committee stage of the Bill, my hon. and learned Friend the Member for Kettering (Mr. Mitchison) argued with the Economic Secretary to the Treasury about the present financial position. My hon. and learned Friend asked:
Then what is this Bill for?
The Economic Secretary told us in his reply that
Under Section 5 of the 1953 Act, the moneys to be provided for the purpose of this agreement can be provided only from above the line out of voted moneys."—[OFFICIAL REPORT, 22nd March, 1960; Vol. 620, c. 380.]
I have been looking at the agreement, which is now enshrined in the Bill. Under the second head of agreement we read:
The loan may be drawn in eight tranches over the four years from 1st October, 1959, provided that only one tranche may be drawn

in any one of eight consecutive periods of six months each, the first beginning on 1st October, 1959.
We now know that a tranche has not yet been paid. If it is to be paid, as I read the agreement it must be paid before next Friday. In other words, the first six months of the currency of the agreement, beginning on 1st October, 1959, will expire on 1st April, 1960, which is next Friday. The Bill will not have become an Act of Parliament by then. How are they to pay the first tranche?
The Bill is designed to enable the loan to be made below the line; to be made not by moneys voted for the right hon. Gentleman's Department, but voted in the way described in the Bill.
If I am right, the Government have until Friday next to pay the first tranche, and if they are to pay it according to the Bill, they must get the Bill on the Statute Book first. Am I right or wrong about this?

Mr. Nabarro: The hon. Member is wrong.

Mr. Lee: Then let us have a proper answer. During the passage of the Bill the Economic Secretary told us that it was no good our arguing Amendments because the agreement was already valid and had been passed. In other words, there was no point in our disputing the basis upon which the Government decided to make the agreement. As far as we were concerned, it was a fait accompli.
The right hon. Gentleman has just reminded us that it is eighteen months since we were first told that this was going on. Why have the Government not pursued the matter and paid the first tranche? The right hon. Gentleman has just told us again that this is a valid agreement, which came into operation eighteen months ago. The President of the Board of Trade has told us that the Scottish people should be bowing on their knees in gratitude to the Government. But we now know that not a halfpenny has been paid out since then, and that unless the Bill becomes law by Friday next they cannot pay within the terms of the Bill.

The Minister of Power (Mr. Richard Wood): The hon. Member is quite right. If the Bill is not passed the Government


cannot pay more than the sum of £1 million which appeared in my Vote, against the first needs of the company. The reason why a tranche has not been drawn is that it has not yet been required. The money will be available later, when the Bill is on the Statute Book and it will then be possible for tranches to be drawn by the company as they are required.

Mr. Lee: I am obliged to the right hon. Gentleman. I think that he was saying that the first tranche is out already.

Mr. Wood: No.

Mr. Lee: Let me quote again from the agreement:
The loan may be drawn in eight tranches over the four years from 1st October, 1959, provided that only one tranche may be drawn in any one of eight consecutive periods of six months each, the first beginning on 1st October, 1959.
How can the right hon. Gentleman pay the first tranche under the provisions of the Bill when the final date by which the first tranche must be drawn will have expired—before the Bill becomes an Act?

Mr. Wood: tranches are not necessarily equal instalments. There need be no money drawn by 1st April of this year, or 1st July, or 1st September, but after that tranches can be drawn every so often, up to a maximum of £50 million.

Mr. Lee: This gets curiouser and curiouser We all agree that within a four-year period there are eight periods of six months each. The first six-monthly period finishes this Friday. I am not arguing whether or not the tranches are equal, but I am saying that the currency on the first tranche will expire this Friday. We are now told that the tranches will not be in equal amounts. In that case, why have eight tranches? Why not give them the lot in the first tranche? Is there anything to prevent that happening?
Why have we had these rather peevish suggestions, especially from the Economic Secretary, that the House should not expect to have a detailed discussion of the matter, and that we should not expect to be able to amend something because it was signed and sealed long ago? Those arguments have been revealed as a rather

petulent way of trying to rob the House of its rights and duties in regard to an examination of the agreement. That being so, I would still like a more detailed explanation by the right hon. Gentleman as to the suggestion I have made that the first tranche will never be drawn.

Mr. Harold Lever: It can be made up later.

Mr. Lee: The right hon. Gentleman told us that the loan to Colvilles was not a case of private enterprise coming to the Government for assistance. I shall try to develop that point as I go along. It is not clear who approached whom in these matters. In any event, when we study the Bill, and consider the discussions that we have had upon it, it becomes obvious that the Government have one claim to a place in our history books; they have managed to produce a Bill for which apparently nobody in the House can find a good word, but which, nevertheless, will reach the Statute Book. Perhaps the epithet or epitaph which best describes hon. Members' reactions to the Bill was given by the hon. Member for Shipley (Mr. Hirst), who referred to it as shattering and dastardly.
Despite its welcome from Government supporters, the Bill remains in the same state—a state in which no safeguards are provided with regard to the use of public money; where there are no assessors, no provision for an equitable distribution of profits, no representation by Government-appointed directors, and no provision to enable the House to insist upon the Government asking it for sanction in regard to any point that may arise. It remains so because our efforts to amend it were victoriously opposed by a combination of the Tories and the Liberals.

Mr. H. Lever: My hon. Friend has referred to the hon. Member for Shipley (Mr. Hirst) describing the agreement and. presumably, the Bill based upon it—

Mr. Nabarro: Speak up. Speak up. I cannot hear.

Mr. Lever: We are not all equipped with the same kind of bellows as those possessed by the hon. Member for Kidderminster (Mr. Nabarro)—which, although he may not think so, is rather


fortunate. My hon. Friend has referred to the description of the agreement, and presumably the Bill based upon it, as shattering and dastardly, by the hon. Member for Shipley. Do I understand him to quote the description given by the hon. Member for Shipley with approval, and for the same reasons? If he approves of that description for reasons different from those advanced by the hon. Member for Shipley, that hon. Member's speech cannot be prayed in aid of his argument.

Mr. Nabarro: That has shot the hon. Member down.

Mr. Lee: I have just said that the description of the hon. Member for Shipley best brought together—put into one frame, as it were—feelings expressed on both sides of the House, including those from this Box, expressed both on Second Reading and in Committee on the Bill.

Mr. Peyton: These feelings among the Opposition appear to have come to light very late in the day. If the hon. Gentleman cares to cast his mind back a little further to the Second Reading debate he will remember that we had a very chill, midwintery speech from his right hon. Friend, the Member for Middlesbrough, East (Mr. Marquand).

Mr. Lee: There was not a single speech from hon. Members opposite in support of the Bill.

Mr. Nabarro: Nor from the hon. Member's side.

Mr. Lee: We were not here to support the Bill in that sense.

Mr. Lawson: May I remind my hon. Friend that, as the Member for the constituency in which the strip mill in Scotland is to be built, and speaking for my hon. Friends the Members for Scottish divisions on this side of the House, I said that we were very much behind the purpose of the Bill. We had some objections about how it should be done, but we were very much behind the building of the strip mill and, in our view, if it were necessary for the money to be found publicly then it should be found publicly.

Mr. Lee: I am not disagreeing with that in the least. [HON. MEMBERS: "Oh."] I am not disagreeing with getting new industry into Scotland. My belief is that the Bill was brought in and a publicly-owned company was deliberately pushed in with Colvilles, and the argument about distribution policy was brought in, merely as a pretext to cover up this disgraceful loan to Colvilles.
I was describing what the Tory Party thought about the Bill. The passage of the Bill has proved a trying ordeal for hon. Members opposite. The Economic Secretary, speaking for the Government, began his arduous duty with the statement the other evening that so far as his party is concerned, "We are united in our aim." A little later he heard that unity underlined by one of the great united telling him that the sooner the Prime Minister kicked him out of office the better it would be for the Tory Party. Unity of this type is really something to be admired.

Mr. Nabarro: The hon. Gentleman must be fair about this. I attacked my hon. Friend the Economic Secretary simply because he was purporting to endorse Socialist practices from ten years earlier That is why I attacked him.

Mr. Lee: I do not want the reason for the hon. Member's attack; I was just quoting the attack itself. Who knows what reasons are behind what the hon. Member says, anyway? The Bill does not leave the hon. Member altogether unscathed. It is, indeed, a witness of the passing of his reputation as a great rebel against the Government, in that both he and his hon. Friends who breathed such venom and fire against his Front Bench in the small, still hours of the morning not only refused to vote for the Amendment, but—

Mr. Deputy-Speaker (Sir Gordon Touche): May I remind the House that this is a debate on Third Reading and we are not discussing previous debates on the Bill?

Mr. Lee: I see the point, Mr. Deputy-Speaker, but on Third Reading we discuss that which flows from the contents of the Bill. I felt it necessary to comment that the "nobbling" of the hon. Member possibly leaves the House with a cause without a rebel. We shall watch


his transition towards the P.P.S. bench with the greatest sympathy.

Mr. Nabarro: I will sit there now if the hon. Gentleman wishes.

Mr. Lee: "Hope springs eternal."
The Bill itself was presented in its present form, that is, as a method of financing a public firm and a private firm for no other reason than to cushion its passage through the House. There was not the slightest reason which anybody has yet adduced why Richard Thomas and Baldwins should have been financed in this way.

Mr. Peyton: Mr. Peyton rose—

Mr. Lee: I cannot give way again.
I repeat that there has been no single reason adduced why Richard Thomas and Baldwins should have been financed in this way. As a matter of fact, we all thought that it should have been, and could have been, financed in the usual way. The Colville loan has been tied up in the Bill because of the fears of many of my hon. Friends from Scottish constituencies, who, naturally and properly, are extremely concerned about unemployment in Scotland.
The right hon. Gentleman told us that this was not an approach by a private firm to the Government. That is not what the right hon. Gentleman the Minister of Power said when he opened the debate on Second Reading of the Bill. He said then:
But in the summer of 1958, about eighteen months ago, Colvilles, of Scotland, proposed a semi-continuous strip mill additional to their developments at Ravenscraig and it was the company's ability to carry out the project in association with its new work which made this a viable and attractive proposition. It was dependent at that time on the willingness of the Government to provide finance."— [OFFICIAL REPORT, 18th February, 1960; Vol. 617, c. 1445.]
In other words, the right hon. Gentleman is wrong if his right hon. Friend the President of the Board of Trade is right. In the summer of 1958, Colvilles proposed—

Mr. Maudling: Mr. Maudling indicated dissent.

Mr. Lee: Let us have it one way or the other.

Mr. Maudling: The firm made that proposal after the Government had pointed out to it the desirability of

having a thing of this kind in Scotland. It is all quite simple.

Mr. Lee: We now know that the Government approached Colvilles first.

Mr. Maudling: Mr. Maudling indicated assent.

Mr. Lee: That is not what the right hon. Member said before. The Government really ought to make up their mind about this. The Minister of Power has stated that the initiative came from Colvilles; now the right hon. Gentleman says that the proposal was the other way around.
The contents of the Bill in regard to Colvilles—this is the gravamen of the charge from this side of the House— constitute the terms of a loan which is capable of being demanded only by a firm in a superbly strong bargaining position. Yet we are asked to believe that at times Colvilles was in an extremely weak position and that because of the threat of nationalisation it was, in fact, in a very weak bargaining position. I wonder why the Government could not have explained to Colvilles that it had no right to demand these terms and that its bargaining position, because of the imminence or dangers of nationalisation, was such that it had no right to demand the sort of terms we now see in the agreement.
The logic of this threat of nationalisation argument is that after the negotiations had taken place, after the threat of nationalisation had gone, the firm could have obtained better terms than those which we are now discussing. What is the logic of that? The hon. Member opposite argued about the awful threat of nationalisation at the time when Colvilles was able to obtain these terms from his Government. Suppose the threat of nationalisation did not obtain, would Colvilles be in a stronger position?

Mr. Peyton: I am obliged to the hon. Member for giving way. He has conducted a kind of bogus international match between the claims of Scotland and of Wales, but, in the case of Colvilles, the Government, rightly or wrongly— certainly rightly, in the view of the Opposition—asked the firm if it would put up a strip mill. Languishing as it was under the threats of the party opposite, it could not get the money—£50 million—to do so. The hon. Member has a responsibility in this.

Mr. Lee: None of which is intended to refute the basic point I made. The fact is that Colvilles knew, as we all knew and all know now, that strip production in Britain had to be stepped up. The firm knew that Government action in denationalising steel had robbed the nation of the power of making a decision over the siting or size of strip mills. This Bill represents a part of the price the taxpayer has to pay. After consulting the Iron and Steel Board, the Government agreed to give financial help, and the Prime Minister, in the House on 18th November, 1958, made a fairly long statement in which he made it clear that the Government accepted the recommendation of the Iron and Steel Board that additional capacity was necessary for the production of strip mill products.
The Bill that we now have before us is the result of the Government's panic over their failure to get sufficient strip steel. It could well become the first of a series as steel imports increase and the balance of payments position deteriorates. It is extremely interesting at this stage to look back on the parent Act of 1953. One realises why the then Minister of Supply, now the Minister of Aviation, said:
When the industry has returned fully to private enterprise there will be no public money involved at all."—[OFFICIAL REPORT. 28th January, 1953; Vol. 510, c. 1138.]
It is now seen by all of us, and lamented by the hon. Member for Kidderminster, that denationalisation in this industry has merely put more public money into it, not less. Having saddled us with this liability for steel, the same right hon. Gentleman seems determined to sink more public money into private aviation than into the steel industry.
I said that there were a number of reasons why we objected to the Bill. The basic objection is in the method of financing private companies which are quite able to finance themselves. More people than we are worried about this. An organ which hon. Members opposite generally subscribe to told us this on 1st March this year:
Vast sums of public money are being shovelled into private industry at this moment. … Once the word gets around that gold has been struck in Whitehall, we shall see such a rush as will make Klondyke look like a Sunday school outing. There will be great forests of outstretched hands—not all over-clean. There will be pressure groups

packed tight to the horizon, all lobbying and manoeuvring as never before, not all of which will stop short of bribery and corruption.
That was in the Daily Telegraph.
Hon. Members have given various estimates of the time factor during which, under this Bill, public money may be tied up in Colvilles. If we look at the heads of the agreement we find that head 11 says:
The company will repay the loan with any unpaid interest to the date of payment not later than 1st October, 1978 ".
Even if the £14 million of public money which I think is at present in Colvilles is returned, the only denationalisation before 1978 will be denationalisation of the profits and, as the equity was sold by January, 1955, that will involve a period of twenty-three years. Colvilles equity was sold early in 1955. That did not justify the need for the firm coming to the Government for this money.
Between 1955, when the £1 equity shares were sold at 26s. each, bringing gross receipts of £13 million, and Friday, 18th March, this year equities have risen to 75s. 6d., a capital appreciation of 190·4 per cent. and a monetary appreciation of 49s. 6d. In 1955, the amount of ordinary dividend after tax was £652,000 and in 1959 it was £890,000. This is not the kind of firm which is in need of public assistance which the Government are now giving to it.
I look back on some of the debates which took place on the 1953 Act, which was a Measure providing the central instrument in the agreement we are now discussing. The right hon. Gentleman the present Minister of Aviation told us on 25th November. 1952:
The Bill has two main objectives. The first is to establish a comprehensive system of public supervision embracing the whole iron and steel industry, and so bring to an end the extremely harmful split created by the 1949 Act. The second is to restore independence, initiative and financial responsibility to the companies … "—(OFFICIAL REPORT, 25th November, 1952; Vol. 508, c. 266.]
In the light of this Bill perhaps the party opposite will agree that "independence, initiative and financial responsibility" seem now to have a hollow sound.
In the course of the passage of the Bill, my hon. and right hon. Friends


have attempted to make it a better Bill. We have attempted to get public representation within the Colville organisation. We have failed because of a combination of Tories and Liberals who refused to support us in that effort.

Mr. Deputy-Speaker: Order. We cannot go into Amendments which are not included in the Bill.

Mr. Lee: I was looking at the Bill as it is now without those Amendments and deploring the fact that they are not there. I am saying what is in the Bill and what I would have liked to have gone into it.
The Bill is in this state despite our efforts to make it better. What has been revealed by a Bill of this type is that the party opposite, with its Liberal friends, is determined that the distribution of power in this country shall remain in private hands. I hope that the nation will take a lesson from this. When we have Bills of this description, so biassed in their approach, giving no guarantee of the proper use of public money and showing the determination of the present Government and the Liberal Party, I hope that the nation will see that the only way to get back to a sense of decency in which it can get value for money is to renationalise the industry.

4.48 p.m.

Mr. Gerald Nabarro: This Bill in its passage through the House has been the subject of more criticism from every quarter than any Bill I can remember in the ten years I have sat in this place. There have been a variety of reasons, of course, for the criticisms, but every criticism has been virulent and valid, according, as I understand it, to the philosophies of the respective political parties.
Of course, I respect the views of hon. and right hon. Members opposite who say that the only answer to the problems of the steel industry is complete nationalisation. They fought the last General Election and the one before and the one before that precisely on that policy. They were defeated at all three General Elections.

Mr. Deputy-Speaker: Order. I am afraid that cannot be discussed on the Third Reading of this Bill.

Mr. Nabarro: I shall relate it exactly, Mr. Deputy-Speaker, to the Third Reading when I have finished this particular paragraph. My party takes the exactly opposite view. The purpose of this Bill, shortly expressed, is the removal of £120 million from annual Votes and putting that sum permanently as a charge on to the Consolidated Fund. That is the purpose of the Bill. Our difficulty in judging the merits of the Bill, of course, arises from the fact that £70 million out of the £120 million goes to a company which is still nationalised and the other £50 million goes to a company which is denationalised and, though a public company in the sense of the Companies Act. 1948, is a private enterprise concern.
I look beyond immediate considerations for the reasons which prompted Her Majesty's Government in this extraordinary mixture within one Bill of voting money to a public company, on the one hand, and a private company, on the other. I think the reason is the inherent artfulness in the minds of my right hon. Friend the President of the Board of Trade and my right hon. Friend the Minister of Power, for they knew that it would be exceedingly difficult for my hon. Friends and myself to vote against this Bill at any stage while those two different considerations were inherent within it, a nationalised concern, on the one hand, and a denationalised concern, on the other. They were even more artful—I address my remark particularly to my right hon. Friend the President of the Board of Trade—

Mr. J. T. Price: He has gone white.

Mr. Nabarro: Yes, he has gone white —because of the oft-repeated claim that these loans were being made in the course of honouring solemn obligations and contracts entered into before the last General Election.
This claim has again been made this afternoon from the Treasury Bench and from the Opposition Front Bench. I do not dispute it. These obligations were entered into, and, of course, in the early hours of last Wednesday morning, I was faced with the appallingly difficult decision—[Interruption.]—yes, on behalf of my hon. Friends and myself—as to whether to vote in a way which would


imply that I was in favour of breaching a solemn contract or whether to let a Bill go through which is anathema to my hon. Friends and myself. I decided upon the second course—

Mr. Peyton: We decided.

Mr. Nabarro: We decided. I am sorry. At least, the intervention of my hon. Friend for Yeovil (Mr. Peyton) demonstrates that I have some friends in the House. I am deeply grateful to him.
My right hon. Friend has been artfulness personified throughout this Bill. It is undoubtedly the fact that all Conservative Members are gravely apprehensive about the growth of State paternalism. It is no good my right hon. Friend the Minister of Power grinning when I say that. I hope he will stop grinning. This is a serious matter. He is laughing now, which is much worse. My hon. Friends and I are gravely concerned about the growth of State paternalism, the investment of large State funds in private industries. This, of course, has been the principal cause of our anxiety about the Bill. I cannot vote against the Third Reading of it for the same reasons that I could not—

Mr. Charles Loughlin: The hon. Gentleman did not vote against the Second Reading.

Mr. Nabarro: I did not vote against the Second Reading.

Mr. Loughlin: Or in favour of his Amendment.

Mr. Nabarro: If the hon. Gentleman wishes to rise to make some intervention I will give way to him.

Mr, Loughlin: The point I wish to make is that the hon. Member for Kidderminster moved an Amendment the other morning and then went into the Division Lobby with the Government against his own Amendment.

Mr. Nabarro: It would not, of course, be in order for me to dwell on Committee matters, but I will respond to the hon. Member for Gloucestershire, West (Mr. Loughlin) in simple and explicit terms. I did not vote against the Second Reading, I shall not vote against the Third Reading, and I did not vote against the Government on my Amendment in

Committee, for the same explicit reason throughout, that, had I done so, I should have been asking the Government to break a solemn contract and agreement which they entered into with Colvilles before the last General Election. I will quote certain words to the hon. Gentleman. He was not here the other evening.

Mr. Loughlin: Mr. Loughlin rose—

Mr. Deputy-Speaker: Order. We cannot go into these matters on Third Reading.

Mr. Loughlin: On a point of order, Mr. Deputy-Speaker. The hon. Member said that I was not here. I forced a Division to enable him to go into the Division Lobby.

Mr. Nabarro: The hon. Member was not here in the course of our debates. Had he been in the House a little longer, he would have known that we on this side have often played the same trick on the Socialists, with very good effect, when they have been afraid to vote on their own Amendments, as, for example, on the matter of National Health Service charges in 1951.

Mr. Deputy-Speaker: Order. I hope the hon. Gentleman will return to the Third Reading of the Bill.

Mr. Nabarro: I will, Mr. Deputy-Speaker. I was about to quote words which have a great relevance in any controversy about who should vote and who should not vote and on what occasions:
I say at once that I would compete with any member of this Committee, including my right hon. Friend the Minister of Power, in defending the sanctity of contracts, and I do not wish to see the contract made between Her Majesty's Government and Colvilles broken, vitiated or weakened in any way, whatsoever." —[OFFICIAL REPORT, 22nd March. 1960; Vol. 620, c. 438.]
In view of the Rulings given by the Chair about what is in order for discussion on the Consolidated Fund Bill annually, the only way in which my hon. Friends and I can register our sternest disapproval of the growth of State paternalism and the huge investment of public funds in private industry is by the vehicle of the very kind of Amendments which we moved late last Tuesday night and which we did not—

Mr. Loughlin: Which the hon. Mem-ran away from.

Mr. Nabarro: The hon. Member for Gloucestershire, West is still seated upon his broad backside shouting things at me. I will give way once again if he wishes. We have all got his point. The Sunday Express yesterday called it an act of cowardice on my part not to vote.

Mr. Deputy-Speaker: Order. We must return to the Third Reading of the Bill.

Mr. Nabarro: But this is the principle of the Bill, Mr. Deputy-Speaker, the investment of money in Colvilles.

Mr. Deputy-Speaker: The hon. Member has been arguing about various events which took place during the Committee stage.

Mr. Nabarro: Very well, Mr. Deputy-Speaker; I will leave the Sunday Express and say that, for precisely the same reasons, I shall not vote against the Third Reading of the Bill. I believe overwhelmingly in the sanctity of contracts. But there has been a very real lesson to my hon. Friends and myself in this Bill. We cannot vote against the Third Reading of the Bill because contracts were entered into by Her Majesty's Government eighteen months ago. This will not be so in the future when State moneys are furnished for private industry.
We have learned our lesson on this occasion. In the future, we shall not be confronted with a fait accompli and a situation wherein we have to advocate the breach of contracts in order to make our point. We shall vote where possible before the money is granted, Which is the proper time to do it. Having regard to the undertaking given by my right hon. Friend the Leader of the House that there will be ample opportunity to debate the tranches of investment in this context and in regard to other nationalised and denationalised industries, I think I can say that my hon. Friends and I have learned a salutary lesson in demanding a debate before the money is granted and not being placed in the invidious situation in which we have found ourselves throughout our proceedings on this Bill.
We are not alone in such an invidious situation. The hon. Member for Newton (Mr. Lee), who readily nods his agreement, is in the same situation on this Bill, but for different reasons.

Evidently, neither he nor any hon. Member opposite will vote tonight against the Bill.

Mr. Diamond: I will, if I can.

Mr. Nabarro: Jolly good. If the hon. Member is in a minority of one, that will be highly satisfactory. I shall be the first to congratulate him upon his courage and his lack of cowardice. I only regret that I cannot join him in the Lobby, because if I did so it would be again implied that I was in favour of breaching a contract.
Long before this Bill reached its Committee and Third Reading stages, very apposite words were written in an organ which I do not believe can be regarded as unduly Conservative in its outlook— not the Daily Telegraph, but the Financial Times of 25th February, 1960. I quote these words, strictly in the context of this Bill:
Last summer the Prime Minister unveiled his Government's quite remarkable scheme to pay the cotton industry a large amount of money to shut down its redundant plants. Since then there has been the establishment of the Chandos Committee on the new Cunarders, the gun law handling of the aircraft industry by Mr. Sandys, and now there is Mr. Maudling's vigorous treatment of the location of the motor industry. Along the line there was also a promise of a £50 million loan to Colvilles for their expansion plan … So far there does not seem to have been any general appreciation behind these piecemeal manœ;uyres. Certainly it is much more easy to justify them individually than as a whole. Neither the Government nor industry itself seems to know how far it is prepared to go along this line of policy, how big a commitment can be supported "—

Mr. H. Lever: On a point of order. Is it in order for the hon. Member for Kidderminster (Mr. Nabarro) to force hon. Members who do not take the Financial Times and do not read its leading articles to hear them in extensol Is he not restricted merely to quoting briefly from documents?

Mr. Deputy-Speaker: The hon. Member for Kidderminster (Mr. Nabarro) is quoting a document, but a great part of it is quite irrelevant to this debate.

Mr. Nabarro: I am sure that you, Mr. Deputy-Speaker, heard the reference to Colvilles.

Mr. Deputy-Speaker: Much of the article seems to be irrelevant to the Third Reading of this Bill.

Mr. Nabarro: There is £50 million for Colvilles in this Bill on Third Reading. There is only one sentence to complete the quotation:
The Conservative Party itself should give much more thought to this matter.
I will give the quotation to the hon. Member for Manchester, Cheetham (Mr. H. Lever) so that he can read it for himself.

Mr. H. Lever: I have read it.

Mr. Nabarro: Did the hon. Member say that he wrote it?

Mr. Lever: I read it.

Mr. Nabarro: Judging from the hon. Member's antagonism to the speech from his own Front Bench and his support for Conservative principles throughout this Third Reading debate, he might have written the words himself.
Here is the second lesson to be derived. This debate and the vigorous criticism of the Treasury Bench and all its occupants—they are collectively artful and collectively responsible for the Bill—have taught a second lesson to the overwhelming majority of Conservative Members. There is a very grave threat to the philosophy of the Conservative Party and the whole of the practice and implementation of Conservative policy inherent in a system of a large-scale investing of taxpayers' money in private industries without hardly any Parliamentary accountability. You will recall, Mr. Deputy-Speaker, the statement made by the Leader of the House in the early hours of last Wednesday morning. He said, "We will see that a financial statement is laid before the House".

Mr. Lee: That does not mean anything.

Mr. Nabarro: It means something, but it does not mean very much, because we on this side are again placed in the hopelessly invidious position of not being able to amend this statement and either having to vote against it altogether or having to accept it altogether. That has been our difficulty throughout the passage of this Bill and this afternoon. We want some of the money invested but we do not want all of it invested.
I shall be applying myself with assiduity to the whole of this problem of how Parliament year by year can control

the huge sums of capital moneys vested in State industries as well as, in part measure, in private industries before the money is voted and before it is invested, not in retrospection eighteen months to two years removed, which is surely the scourge of every quarter of the House. Every hon. Member surely must believe that a primary duty of ours is to guard public expenditure, whether it is in the context of nationalised industries or on straightforward Departmental Votes over which, sadly, we have insufficient control.
I shall not vote against the Bill. I shall not be guilty of an act of cowardice. I am defending my reputation in industry and commerce—something which the hon. Member for Gloucestershire, West would never understand—which dictates that the sanctity of a commercial contract must at all times take precedence over every other consideration. That is why I shall not vote against the Bill and why I did not vote in the early hours of last Wednesday morning during the Committee stage.

Mr. Loughlin: On a point of order. Is it in order for an hon. Member to charge another hon. Member with not accepting the sanctity of contracts?

Mr. Nabarro: The hon. Member does not.

Mr. Deputy-Speaker: I do not think the hon. Member for Kidderminster (Mr. Nabarro) made that imputation.

Mr. Loughlin: Further to that point of order. Immediately I put the point of order to you, Sir, the hon. Member said that I do not. One can only construe that as meaning that I do not accept the sanctity of contracts.

Mr. Deputy-Speaker: I do not think that the hon. Member for Kidderminster made any reflection on the hon. Member's character.

Mr. Loughlin: Further to that point of order. I am very sorry about this Mr. Deputy-Speaker, but—

Mr. Nabarro: The hon. Member is very cross now.

Mr. Loughlin: —if an hon. Member charges another hon. Member with not accepting the sanctity of a contract, is not that a reflection on the hon. Member's character in that it suggests that the hon. Member is dishonest?

Mr. Deputy-Speaker: I did not hear any suggestion that the hon. Member for Gloucestershire (Mr. Loughlin) is dishonest. I do not think we should be too thin-skinned about criticism.

5.8 p.m.

Mr. John Diamond: I respect the views of the hon. Member for Kidderminster (Mr. Nabarro). We shall not make much progress in our debates unless we accept the sincerity of one another's point of view. I fully accept that the hon. Member means what he says in drawing attention to the supreme importance of honouring obligations and giving that as the reason why he will not vote against the Third Reading. I also believe that it is not necessary to say that every hon. Member also believes in the sanctity of the agreement. If I believed that the sanctity of the agreement would be called into account by voting against the Third Reading, I too would not vote against it. But, as I am satisfied that it is not being called into account, I shall do everything to vote against the Third Reading of the Bill and persuade my own Front Bench to do the same.
The Bill is not about the provision of two strip mills. It is about the provision of finance and whether it is to come above or below the line. We are debating only the financial aspect, and it is the terms of the agreement which we shall be deprecating by voting against the Third Reading, not the provision of the strip mills. If it were a fact that the strip mills would not go ahead, then we should all be in a very different position. But it is not such a fact. It has never been claimed to be such a fact by the Government Front Bench itself. The President of the Board of Trade and the Minister himself have both made it perfectly clear that this is a Bill limited to dealing with the provision of finance and to nothing else.
I am going to make clear the reasons why I, and, as I see it, any hon. Member of conscience, could not vote for the Third Reading of the Bill. In the first place, I regard this matter as a plain breach of trust. We are the trustees of the nation's resources, and under the Bill we are proposing to allow an individual firm, Colvilles—because it was made made quite clear on Second Reading that the transfer of money from the

State to a nationalised industry is a bookkeeping entry which concerns no one at all—to be loaned money by the Government on terms far more onerous to the nation, for which we are trustees, than need have been obtained.
I find it impossible to support a Government which does not stand on their hind legs and get the best possible terms on behalf of the beneficiaries for whom they act as trustees.

Mr. H. Lever: Would my hon. Friend apply the same principles to the financing, for example, of the film industry?

Mr. Diamond: I am not talking about the film industry, and I will not be diverted into discussing it.
I regard this matter as one of the most serious which has taken place for some time. There is great concern in the House of Commons, as there was during the Committee stage. My hon. Friend the Member for Manchester, Cheetham (Mr. H. Lever) was not present throughout the proceedings.

Mr. Lever: I read the proceedings very carefully afterwards.

Mr. Diamond: My hon. Friend says he read the proceedings very carefully afterwards. Those who take part in debates know that it matters enormously what is said and how it is said. In Committee it is not always possible to correct our speeches, and even HANSARD is not a reliable guide to the Committee stage.
I say that what is proposed is, in my view, a plain breach of trust. I gave my reasons on Second Reading and it would be wrong to repeat them all over again. Nothing which has been said from the Government Front Bench has satisfied me that it is not a breach of trust. There has not been, apart from the Government Front Bench, a supporting speech in the House, so one has had no help in that direction.
In Committee we attempted without success to improve the terms in such a way as to enable the Government honourably to deal with the matter without breaching the agreement. We made suggestions which could easily be considered with the directors of Colvilles and which could be added to the procedures envisaged under the Bill. But none of those things has been


accepted. We have attempted to get a rate of interest which is fair to those whose finances we are here to look after. That has been refused.
We have been told only at the very last minute that Colvilles is going to have to pay for this loan ½ per cent. less than local authorities have to pay for the money they require with which to build homes for the people. Yet we know that during the period when this loan was being negotiated Colvilles was earning, respectively, 60 per cent. and 74 per cent. on its equity capital. The figures for the last two complete years during which these negotiations took place show that in 1957–58 Colvilles made just on 60 per cent. net profit on its capital and in the following year 74 per cent. net profit.
It defies my understanding how anyone can suggest that a company with a capacity to earn such rates of net profit is unable to pay even as much as a local authority when it is borrowing money from the State. Therefore, those of us who regard our position with seriousness will not accept for one second that, so far as the loan to Colvilles is concerned, the Government exercised their responsibilities to the full in arriving at the terms of this agreement.
I repeat what the hon. Member for Shipley (Mr. Hirst) said. My hon. Friend the Member for Cheetham should have been here to listen to the hon. Member for Shipley, because he made an absolutely sincere and heartfelt speech. I am sure that my hon. Friend read it, but I am just saying that no one who listened to the hon. Member for Shipley could have one moment's doubt that he was deeply moved by what is going on. The hon. Gentleman is in the great difficulty that he cannot vote against his Government. There is no doubt about what he feels about the matter and I share his views, to quote his own words, that this is a "shattering and dastardly" contract. It is not often that a responsible back bencher on the Government side is able to describe in all sincerity an agreement made by his own Front Bench as "shattering and dastardly".
That is the first reason why I cannot support the Bill. The second reason is even more fundamental, and is one which

affects everyone in the House. I regard the Bill as a breach of faith as between the Government and the House of Commons—a plain breach of faith—and I shall attempt to show why.
I regard it as the duty of a Government not only to act legally, as of course they do, but to act in good faith with the House of Commons. I must, therefore, refer the House to the Act of 1953 which is referred to in the Bill and which gives the authority which the Minister has claimed and which entitles him to come to the agreement reached. Let me first of all read the Title of the Act. Remember that what we are discussing is a loan of £50 million—an investment by the country of £50 million—to a steel firm. The 1953 Act is described as an Act to repeal the Iron and Steel Act, 1949, and to dissolve the Iron and Steel Corporation of Great Britain, and, among other things, to provide for the return of iron and steel undertakings to private ownership and for the disposal of property rights, etc. That is the purpose of the Act.
Who would have thought in 1953—I was not here myself at the time; I was "resting", as they say on the stage— that this Act, which was the Act to denationalise steel, to divest the nation of its investment in the steel industry, was to be used as the authority to pump £50 million into a private denationalised firm?

Mr. Raymond Gower: The hon. Gentleman will recall that the same Act also prescribed the powers of the Iron and Steel Board. Does he recall that hon. Members opposite pressed the Minister of Supply at that time, the present Minister of Aviation, to take greater powers than he now possesses to stimulate industry and new developments in the steel industry?

Mr. Diamond: As I explained, I was not here, and therefore I cannot recall these things. Of course, I accept what the hon. Gentleman says, though I do not think that it affects in the slightest the point which I am making.
My hon. Friends on this side of the House no doubt felt, and still feel, that that was the way in which the matter should have been handled. Had it been handled according to Labour philosophy there would have been no problem.


Indeed, had it been handled according to Conservative philosophy there would have been no problem. It is only because of this bastard arrangement that we are in this difficulty.

Mr. Walter Monslow: As some clarification of what my hon. Friend has said, is it not true that, whilst we agreed with capital investment, we also made it abundantly clear that there should be public accountability?

Mr. Diamond: I am grateful to my hon. Friend for making that point. As I was saying, the Government have acted in breach of faith in not bringing to the House the question of these loans and agreements which they were making under the powers contained in this Act. As every hon. Member at the time must have thought, this was an Act to divest the nation of investments and not to do the very opposite, as the present Bill seeks to do.
The provision in the Iron and Steel Act, 1953, under which the right hon. Gentleman claims these powers—and I am sure that he is right in claiming them—is Section 5, which says that if the Board is satisfied that there ought to be additional production facilities and the Board reports to the Minister that it cannot secure them by means of consultation,
… the Minister may, with the approval of the Treasury, himself provide and use those facilities …
Why did not the Minister provide those facilities? He could have obtained them. Those are the powers which are described in this Act and they are the powers which every hon. Member would have thought at the time he was giving authority to his Front Bench to use.
The Section goes on:
… or make arrangements with any persons for the provision or use of those facilities by those persons, whether as agents for the Minister or otherwise.
An agency was contemplated. Why did not the Minister appoint Colvilles as agents? There would have been no problem at all. Why did not the Minister say to Colvilles, as the Government have said to many firms on many occasions, "Will you please carry out this undertaking for us on agency terms? We will pay you a service fee. All profits and

all losses, capital and interest belong to the nation." Why could he not have said that? He could have done so if he had wanted to.
Nobody anticipated that these powers would be used in this way, and I regard it as a thoroughly back-door method of claiming entitlement to enter into agreements. If agreements are entered into by that back-door method, the only way that the Government can justify themselves is by coming to the House at the earliest possible opportunity, not at the last minute, and asking for approval before the agreements are entered into, or at all events, at a minimum, asking for the comments of this House before spending £120 million. The Government Front Bench seem to be absolutely mesmerised by noughts all over the place, and they seem to think that £120 million can be tossed off just like that. If I were to drop twelve £1 notes on the floor, if that were in order and supposing that I had twelve £1 notes, it would create a sensation. Everybody would notice it. We are talking here not about £12 or £120, but £120 million as to which the Govern-men have not seen fit to come and ask our approval about the arrangement made nearly eighteen months ago.
The Government have treated us worse than the company has treated its own shareholders. Colvilles did not enter into this agreement without consulting its own shareholders. Colvilles entered into a tentative arrangement with the Government, as is pointed out in the heads of agreement, and then went to the shareholders and said, I believe in February, 1959, "We have the opportunity of entering into this arrangement with the Government. We shall have an opportunity of receiving a loan of £50 million on terms which are advantageous to the shareholders. Will you, the shareholders, agree to increase borrowing powers so that we can do this?" The shareholders, knowing that they were on a good thing, did so.
The Government have not seen fit to treat the House of Commons with the same courtesy that the directors of a company treated their own shareholders. That takes a bit of answering. I regard this attitude as absolutely overbearing and over-riding. I am sorry to criticise the right hon. Gentleman because I realise that he was not responsible for


the situation. We know from the date of the agreement that this happened at the time of his predecessor—a predecessor who seems to be aptly named for dealing with the problems of strip mills, a predecessor who apparently may not have learned in the same hard way as we have learned the advantages of keeping the House of Commons and Parliament with you. He may not have learned the advantages of having public opinion with him. There may be other reasons—"mills within mills," as one might say.
At all events, as to the lack of consultation with this House, it is regrettable in the extreme that the Government should not have thought fit to consult us at all until they were compelled to do so. We should remember that this arose over a year ago. Why are we discussing it now? The hon. Member for Kidderminster (Mr. Nabarro) very wisely pointed out the difficulties of having opportunities of discussing this matter. It should have been in last year's Estimates. We should have discussed it then, not this year.

Mr. Nabarro: To be technically correct, part of it was wedged in one of the Estimates. As I cannot possibly hope to read every figure that is published in every Parliamentary paper, I confess that I missed it, but evidently everybody else missed it as well. There was a part of it in some Estimate.

Mr. Diamond: About £1 million, I think.

Mr. Nabarro: It was something very small.

Mr. Diamond: It was evidently misleading—[HON. MEMBERS: "No."]—it was either misleading or needed explanation. One does not expect a £120 million loan to be based on an estimate of £1 million. It was not in last year's Consolidated Fund. I do not understand why the Government have left it until this late moment, as my hon. Friend the Member for Newton (Mr. Lee) said, three or four days before the last possible date for the first tranche to be advanced, and indeed we do not know whether it is to be advanced or not. I do not know why the Government have left it to this last possible moment before consulting us about it.
It is then complained that these are not the circumstances of that time, that the Government are in a different mood from what they were at that time. Why did not the Government protect themselves and raise the matter at that time, if their criticism is valid? That is the way in which the matter should have been dealt with. It is extremely difficult for us as a House of Commons to exercise our rights in supervising this money. As Mr. Speaker made clear to the hon. Member for Kidderminster, there are various ways in which this can be done. Today is our only opportunity of doing it, and that is why we take this serious view about it.
I say, first, that this represents a breach of trust. Secondly, it represents a breach of faith with the House of Commons, in having acted—no doubt, strictly within the letter of the law of Section 5 of the 1953 Act—by what I call a back-door method of getting the authority for the loan and in delaying bringing the matter before the House for about eighteen months after the agreement had been entered into. The third reason why I shall vote against the Bill is that it is totally unnecessary so far as Colvilles is concerned.
The hon. Member for Kidderminster is in the same difficulty as I am, but for somewhat different reasons. It is the fault of neither of us that the Government thought fit to include both of these essentially different principles in the same Bill. It is unnecessary for several reasons. I have already indicated the first reason. The Minister himself could have provide the strip mill without going to Colvilles. Those are the powers which were already indicated in the Act.
The second reason is that he could have appointed Colvilles as agent under a management contract. There would have been no problem about what the rate of interest should have been or about any profits, equity or interest or anything else. It would have solved itself. It would all have belonged to the nation.
The third reason is that Colvilles should have got the money itself. The hon. Member for Wolverhampton, South-West (Mr. Powell) made a very accurate and devastating speech on Second Reading in which he explained carefully, with all the authority that rests in him—for he always goes to the greatest pains and is


always absolutely accurate in what he says—how this money should have been raised on the market.
Also, we have the experience of Colvilles in raising £6 million in debentures in January, 1958. All we know about it is that they were fully subscribed. There is also the interesting fact that in 1955 Colvilles—or rather, I suppose, I.S.H.R.A.—issued shares of Colvilles which were oversubscribed thirteen times. Here I am afraid that we have to do a tiny bit of arithmetic. The amount offered was 10 million shares at 26s. a share, in short, £13 million. This was oversubscribed thirteen times: in short, £169 million was offered, and this was in 1955. Therefore, the Colvilles directors could have kept the £13 million they required and £156 million would still have been left—three times as much as it is proposed to lend to Colvilles under the terms of this Bill.
In those circumstances, I regard it as utter nonsense to say that Colvilles could not have got the necessary funds from its own shareholders on appropriate terms. Of course, the shareholders would not have been "mugs" enough to put up the money on the terms which the Government wish to foist on the nation. But, on appropriate terms, the shareholders would have put up at least the £50 million required. As we know, they showed willing to put up three times that amount, and therefore this Bill is absolutely unnecessary.
Another reason why I shall vote against the Bill is that I am thoroughly dissatisfied with the shifty answers we have received from, at all events, the occupants of the Government Front Bench. I call the answers "shifty". The hon. Member for Kidderminster called them—

Mr. Nabarro: "Artful".

Mr. Diamond: —yes, "artful".
Let me refer first of all—I wish to go as far as I can with the hon. Member for Kidderminster—to one particularly artful reply. Let me refer to the speech of the President of the Board of Trade on 18ih February during the Second Reading of the Iron and Steel Bill. He was answering an intervention of mine when I said:
Having regard to the agreement which has already been made, does the right hon.

Gentleman say that it is not open to the House in Committee to alter the provisions in respect of the terms of the loans?
What we wanted to know at that stage was, could we do anything about this agreement? Was it open to the Committee to do anything about it? Here is how the "Artful Dodger" dodged the answer to my question. He said:
It is not for me to say what may happen in Committee."—[OFFICIAL REPORT, 18th February, 1960; Vol. 617, c. 1559.]
That set the tone for the unsatisfactory answers which came from the Government Front Bench.

Mr. Nabarro: Hear, hear.

Mr. Diamond: They were continued by the Economic Secretary to the Treasury. Let me be clear. I am not accusing the Minister of being either shifty or artful—he is incapable of being either. Let me be equally clear. I am saying that in their answers the President of the Board of Trade and the Economic Secretary to the Treasury disagreed among themselves, went further than they were entitled to go, were shifty, and, up to a point, misleading. Let me give details.
Let me say why I regard them as misleading. At one stage we were asking about altering the agreement, why could not it be altered and what had happened during the course of the negotiations. The argument of the Economic Secretary to the Treasury was that we could not alter this agreement. Here was a solemn agreement. I do not know why the hon. Gentleman called it "solemn". I should regard it as a stupid agreement, a silly agreement—a sinister agreement if hon. Members wish—certainly the hon. Member for Shipley regarded it as a "dastardly" agreement—"a shattering dastardly agreement". But why "solemn", I do not know.
At all events, it was the argument of the Economic Secretary to the Treasury, that we could not alter it. What did the President of the Board of Trade say? He had not said anything like that at all. He said we did not want a different agreement. We were arguing whether there should be an equity interest and the President of the Board of Trade said,
There is no equity participation because we on this side of the House do not believe that when the Government lend money to industry they should have an equity interest in it."—[OFFICIAL REPORT, 18th February, 1960; Vol. 617. c. 1552.]


Which is right? Is it right that the Government did want it or is it right—as the Economic Secretary to the Treasury let us to believe—that the Government might have wanted all these things, but there was a fixed agreement and we could not do anything about it?
We were never told what were the negotiations. Up to this minute we have never been told what were the negotiations; what point of view the Government took; what point of view Colvilles took; whether there was any reasonable compromise or not. Today we are in the last stages of the Third Reading of the Bill, we are being asked to approve the Bill and we do not yet know what has gone on. This is indicative of the extent to which the Government Front Bench is not prepared to bring Parliament into its confidence.
The other argument which was continually advanced was, "If only you of the Opposition had said something about this earlier, we should have been able to do something about it. Why did you leave it for all this time before complaining?" In fact, we now know that this was a form of agreement entered into by the Government and no matter what we had said, or what argument we had produced, there was no possibility at all of altering any fundamental term of the agreement. But, at all events, we could have satisfied ourselves that although a stupid mistake had been made on this occasion it would not be repeated on a future occasion. We could have obtained such an assurance. It is clear that in certain circumstances if part of this money, for example, does not go to either of the two borrowers mentioned, we have authorised the issuing of money to a possible third party—perhaps to the Steel Company of Wales. We have authorised the lending of this money and, if it is not used by either of the two borrowers referred to, there is nothing in the Bill to prevent the money going to a third party. We have still had no promise from the Government that if that is to be done, an agreement will be put before this House before it is entered into.
Despite all the trouble we took during the Committee stage discussions we were not able to obtain an undertaking—even from the Leader of the House—that if

on a future occasion other negotiations took place, or the agreement was varied —it could be varied, if there is an agreement between two parties they can agree to vary it—any variation would be discussed and put before this House before it was entered into. In short, the Government have shown themselves to be absolutely unaware of the need to encourage Parliament in its fundamental responsibility of controlling the expenditure of large sums of money.
For all these reasons, I find it impossible to support the Bill. I find it impossible to support a Bill where we have terms which are less favourable than any ordinary person would have been prepared to give. There is an absolutely clear breach of faith in the sense that the Government have used powers intended for an entirely different purpose, and prevented the possibility of discussing this agreement for eighteen months or more. We have had nothing but shifty and contradictory answers from the Government Front Bench.
Now we have got to the stage when, even this afternoon, the President of the Board of Trade said, "If you want to argue about this, put down a Motion." That is his sense of his responsibilities as President of the Board of Trade in the spending of £120 million of the country's resources—he says, "If you want to argue about it, put down a Motion." Why does he not come to talk to us about it? Why does he not seek the approval of Parliament? What is Parliament for? What is to be left of Parliament if we give this Bill its Third Reading?

5.40 p.m.

Mr. John Biggs-Davison: I have heard a number of speeches from the hon. Member for Gloucester (Mr. Diamond) during the course of this Bill. I hope that he will allow me to say that those speeches have been both eloquent and well informed. I feel sure that many of the criticisms he has made of this highly questionable Bill are valid. He used strong words in the speech which he has just delivered. He accused the Government of a breach of faith with the House of Commons. Changing the "d" of my hon. Friend the Member for Shipley (Mr. Hirst) for "b", he spoke of a "bastard sort of arrangement"
My hon. Friend the President of the Board of Trade seemed to say, in the


speech which he made in opening the debate today, that we should not really worry too much about this because it is really a small kind of Measure. That rather recalls the story of the housemaid who gave birth to an illegitimate infant and excused herself on the ground that it was only a very little one.
I shall not be long in my remarks, because I am sure that the hon. Member for Gloucester and his hon. Friend the Member for Gloucestershire, West (Mr. Loughlin) can scarcely wait to divide against the Third Reading of the Bill— and, having heard the hon. Gentleman the Member for Newton (Mr. Lee), I feel quite sure he ought to be in the Lobby with them—but having set my signature to two Amendments which were tabled in Committee by my hon. Friend the Member for Kidderminster (Mr. Nabarro), I should just like to explain where I stand.
It is not my wish to deny either of these two important firms in this vital industry, either the one which is publicly owned still, or the one which is privately owned, the capital which they need for their expansion. Still less—and this is the crucial point—do I want the Government to break the agreement which they have entered into—admittedly, in the very different circumstances which prevailed before the General Election.
I certainly do not want the President of the Board of Trade to seek to break the pledged word of the Government or, to use the jargon dredged up from the turgid thesaurus of his Department, to undertake "a unilateral abrogation".
This debate and the debates which have preceded it mark another stage in the journey towards the better scrutiny of public expenditure, and although we do have on this side of the House a very different philosophy from that of right hon. and hon. Members opposite, they have shown a good deal of common ground between both sides of the House. The consensus of opinion expressed on both sides of the Committee on the question of the Statutory Instrument was quite remarkable, and I think that it is to the credit of the Committee as a whole, and to the credit of the House, that we were able to extract a minimum concession from my right hon. Friend the Leader of the House.
What has emerged from the debates which we have had on the Bill is that on this side of the House, if we are honest with ourselves, though we do not accept the argument, we must respect the argument which has been voiced by hon. and right hon. Members opposite, that if this sort of thing is to be repeated, if the Conservative Government are to put other Measures of this kind through the House, it will become increasingly difficult for them to resist the claims which have been made opposite that there should be an assessor, that there should be a Government director, that there should be, in the words of the hon. Gentleman the Member for Newton, public representation on these companies, even that the State should be entitled to—

Mr. Deputy-Speaker: I must remind the hon. Member that we are now, on Third Reading, confined to the contents of the Bill.

Mr. Biggs-Davison: I was trying to deal with some of the arguments which we have heard in earlier speeches on the Third Reading of the Bill. The point I was trying to make was that I can well understand why right hon. and hon. Members opposite should be urging the argument that if taxpayers' money is to be put into private enterprise then the State is entitled to be represented and even to have a share of the equity of the private company concerned.
In conclusion, I would say to my hon. and right hon. Friends on the Treasury Bench that it is not very long ago that we on the back benches here, under the leadership of those right hon. and hon. Friends of ours, were denouncing the policy put forward by the party opposite in the General Election, the policy which we condemned as back-door nationalisation. My hon. Friends and I are still opposed to it, but the Government will find it hard to resist if they put other Measures of this kind before the House of Commons.

5.47 p.m.

Mr. Harold Lever: The one non-controversial statement which can be made about the Bill is that virtually nobody until today has had a good word to say in favour of the Bill. The opposition described it as an outrageous racket. Conservative


back bench Members have described it at bastard Socialism. Until today the Government rather tended to describe it as an unfortunate necessity. Therefore, there seemed to be more or less unanimous agreement that the Bill was a bad one.
As my hon. Friend the Member for Gloucester (Mr. Diamond) has pointed out, I did not attend the debates in Committee on the Bill, but I read the debates in the OFFICIAL REPORT with some care, and what has tempted me to offer the House a contribution within the discipline of Third Reading is that, when everybody agrees, as said Mark Twain, everybody is wrong, and I am rather inclined to have the feeling that that may be the case. I therefore wish to examine the various grounds offered on both sides of the House in criticism of the Bill to see what merits they have and what merits the Bill has; and quite objectively, and perhaps helped by the rules of Third Reading, the assistance of which has been somewhat denied to some hon. Members of their own choice in the course of their speeches.
Second Reading is for the comparison of the tawdry offering of a legislating Minister with the Utopian possibilities conceivable to the mind of an hon. Member then making a speech. On Third Reading, alas, we cannot traverse those pleasant pastures of Utopia. We must content ourselves with looking at the proposals actually laid down in the Bill, and say whether, on balance, we regard them as desirable or harmful. That is what I propose to do, and to examine the arguments offered to that end.
First, until this afternoon the Government's defence of the Bill consisted of three arguments. They said, "We are bound by an agreement which was signed some time ago and we cannot dishonour that agreement." The second Government argument was that the agreement was necessary because the threat of nationalisation by the Labour Party made it impossible at the time for Colvilles to envisage raising the money on the market. The third reason offered by the Government, until today, was that when the matter was raised in the House in November, 1958, nobody made much of a fuss about it, and that is another good reason for passing the Bill.
I can sum up my views about these three reasons offered by the Government for supporting the Bill by saying that the first is puerile, the second is false, and the third is irrelevant. This is not a very encouraging beginning, and to some extent the Government have themselves to thank for the kind of reception which the Bill has had and the extreme mistrust with which it has been greeted. I said that the first reason was puerile, but that is not to say that it was not worth using by the Government in an effort to persuade some of their own followers.
It seems to have had considerable success with the hon. Member for Kidderminster (Mr. Nabarro) and his hon. Friends. He detests the Bill, but if it is a fact that the Government have entered into a binding agreement with Colvilles it means to the hon. Member that the House is obliged to pass the Bill or otherwise repudiate the sanctity of contract. In other words, if the Prime Minister, in the course of his wanderings, were to contract to supply a dozen maidens to a Middle East potentate's harem, and came to the House for ratification, the hon. Member for Kidderminster would be in some difficulty. He would have to support the necessary Measure to supply the specific number of virgins to complete the contract entered into by the Prime Minister, on the ground that otherwise he would be repudiating the sanctity of contract.

Mr. Nabarro: This is a wholly false analogy, of course. In this instance, a written contract was entered into between Her Majesty's Government and Colvilles eighteen months ago and it is that solemn contract which I seek to sanctify. The analogy which the hon. Member has made with the private whims and desires of the Prime Minister would not be ratified in a contract, quite clearly. Therefore, this is not only totally out of order, but not relevant to the Bill in any way.

Mr. Lever: I was trying to help the hon. Member.

Mr. Nabarro: Help me, indeed!

Mr. Lever: I was trying to help the hon. Member and also chide him with a humorous illustration, but seriously, his argument that one must support


Government legislation implementing a contract, even though the contract itself is infamous, is obviously a rejection of Parliamentary control of all Government contracts. If the Government sign what has been described on both sides of the House as a dastardly contract, it is a dastardly Government, and what one must do is to kick them out and honour the contract afterwards; and one does that by kicking out the Bill. That is recognised Parliamentary practice.
The hon. Member for Kidderminster tries to escape on the back of a whim which I put to him, but the same applies if the Government, for example, negligently and foolishly entered into a contract for the manufacture of cotton cloth and the House thought that the Bill enacting it and the contract itself were horrible and yet it was said that we must ratify it, otherwise we should be repudiating the sanctity of contract. That is puerile. What is not puerile is the attitude of the hon. Member for Kidderminster, which ratifies political cowardice, political insincerity, and expediency in his conduct in the House, for he is making an assault upon the rights of the House and of hon. Members in preaching a doctrine which produces such lamentable results.

Mr. Nabarro: I bet that the hon. Member does not vote tonight.

Mr. Lever: I certainly shall if the occasion arises. Parliamentary machinery has many subtle means of expressing dissatisfaction. When an hon. Member does not agree with the Government he can abstain, he can vote, and he can make demonstrations of various kinds. I do not need lectures from the hon. Member, however well-intentioned, on how I shall express my point of view on the Bill. I shall tell the House very freely my view upon it. I merely point out that it is rather lamentable that the Government should have defended it in this stupid way.
The second point in the Government's reply on the Bill, which is false, is the argument that because of the Labour Party's threat to nationalise the steel industry Colvilles could not raise the money on the market. That is a particularly choice piece of nonsense. One would have thought that if that were true no company could have raised any money on the market, because hon.

Members will recall that the Institute of Directors, and an ardent chorus of the entire Tory Press, pointed out that the Labour Party was not only going to nationalise steel but almost everything else, and especially the 500 companies which were listed in great detail.
But apparently those companies had no difficulty in raising funds. The financial market did not come to a standstill because of the Labour Party's threat of nationalisation, nor was that threat operative in stopping Colvilles raising the money at that time.

Mr. Gower: The hon. Member obviously would agree that no company was so threatened as the companies in the steel industry.

Mr. Lever: I appreciate that. I wish that the hon. Member had said that before the General Election, when we were told that every one of the 500 companies was expressly and directly threatened and there was no mention of the degree of difference which the hon. Member, with some subtlety, is now making. However, this did not stop Colvilles raising the money.
The reason why Colvilles did not raise the money under its own steam can be put very simply. The President of the Board of Trade has been smoked out a little and because of the uproar he has since talked some sense about the reasons for the Bill. The reason why Colvilles did not raise the money was the circumstances in which this deal was done. The Government came to the conclusion that it was very urgent in the interests of the country that there should be a vast increase in sheet steel production, planned, organised and financed in expectation of a greatly increased demand. The steel companies, among them Colvilles, did not take such a hopeful view of likely progress in demand. They were very unwilling to commit themselves to huge financial commitments and, not surprisingly, to meet a demand which they had no confidence would emerge.
Furthermore, the House will remember that, because of a particularly stupid phase of Tory Government policy, we were suffering a recession in the steel industry at the time that the discussions were taking place. Colvilles was not even fully engaged in its existing plant


and here were the Government asking it to branch out into a new production of sheet steel on a gigantic scale and telling it rather hopefully that there would be a huge demand in future. At the time, Colvilles did not appear keen. One of the inducements held out by the Government to Colvilles was that it would be able to secure finance on other than exorbitant terms; in other words, at cost price to the Government.
It is a grotesque distortion of reality, in the light of what happened afterwards, to picture Colvilles—for whom I hold no brief and members of whose board, as far as I am aware, I do not know— as the recipients of National Assistance, as my hon. Friend the Member for Newton (Mr. Lee) did, or to criticise Colvilles for accepting the project. The truth is that this is not a profit-making bloated capitalist who is seeking to add to his bloated profits at the expense of public money. Rather, this is a more public-spirited capitalist being pressed by a Tory Government to undertake work of a particular character in Scotland, not wholly to his taste, for the reasons that I have given—that the Government and the Iron and Steel Board envisaged a huge increase in steel production, on a scale far greater than was envisaged by Colvilles itself.
I know that my right hon. Friend the Member for Battersea, North (Mr. Jay) has often been quoted critically because he said "Whitehall knows best". As a matter of fact, this is one of those occasions when Whitehall did know best, when the pessimism and shortsightedness of Colvilles' board turned out not to be justified and the Whitehall estimates of what was likely to be achieved in sheet steel demand turned out to be the case. However, we must not look at this through the spectacles of today, but at the time when the agreement was negotiated, when there was a genuine pessimism in many well-informed steel circles, when this looked like a hazardous undertaking, and when Colvilles, clearly reluctantly, were induced to engage in it because it at least knew that the finance for it would be provided by the Government at cost.
I yield to no hon. Member in expressing zeal for watching money that goes out of the public purse into the

hands of private, profit-making companies. I can only say, rather ruefully, that when money was being lent under the Film Finance Bill to companies whom it was never intended should pay it back in full, the duty of exercising a zealous watchfulness over public funds fell upon my unsupported larynx, which has never fully recovered from the ordeal, not to mention the trespass on the indulgence of the House which was necessary.
I apologise to my hon. Friend the Member for Gloucester. He was not present because force majeure prevented him, though I have no doubt that he would have intervened had he been here. It seems odd to me that this hallelujah chorus should develop when £50 million is being loaned for an urgent and desirable purpose to an undoubtedly solvent company which will pay back every single farthing of it at no cost to the country, and that there is this zeal to defend the public purse when nothing was said by any hon. Member on either side of the House on that previous occasion.
The plain fact of the transaction is that what the Government get is an immense increase in the national asset of sheet steel production planned in good time, located where the country needs it in good time. What do they pay for this? I deeply respect the sincerity of my hon. Friend the Member for Gloucester. Ordinarily, I deeply respect his sagacity, but I cannot say I do so on this occasion; for this reason, that the Government get a vast new sheet steel undertaking which is vitally necessary, planned in good time, organised by experts and located where the Government want it. What do the Government pay for it? Nothing. The cost of this loan to the Government will be nothing.
If I have the honour to be in this House in 1975, when the last instalment of the loan is due, and if my hon. Friend the Member for Gloucester is here also, and if that money has not been repaid in full, with the total interest paid promptly on the due dates by Colvilles, I undertake to bring my hat into the House and to eat it in the presence of the then Speaker.

Mr. Diamond: Will my hon. Friend allow me to interrupt him, since he has


been good enough to refer to one or two things I have said? May I draw his attention to the fact that it is not absolutely right to say that it was Whitehall that knew best? It was the considered opinion of the Iron and Steel Board, representing the sum of knowledge of all those in steel, which decided that this additional strip mill was necessary, and that, therefore, Colvilles could be criticised if it took a different view. Is my hon. Friend aware that there are various powers—

Mr. Deputy-Speaker: Order. I must remind the hon. Member that he has spoken once.

Mr. Lever: It is not open to doubt that there was an honest division of opinion in steel circles at that time, that Colvilles was far from enthusiastic, and that everything looks sure and certain now because there has been a vast trans-formation. The Government were forced to alter their economic policy to win the election, and it is not yet long enough after the election to put the engines in reverse, though no doubt that will come, so the outlook is rosy.
I have dealt with the reason for the Bill. I hope that I have pointed out that the Bill is a good Bill from the country's point of view, because we shall get some things of great importance. Now I will deal briefly with the hon. Gentleman the Member for Kidderminster and his hon. Friends. Of course, it is all right for my hon. Friend the Member for Gloucester. I am sorry to keep on quoting him, but I listened carefully to what he said. It is all right for him to talk about sincerity. I accept without hesitation that my hon. Friend is deeply moved at the idea of the Bill passing through the House unchallenged. Also I have no doubt that the hon. Member for Shipley (Mr. Hirst), the hon. Member for Kidderminster and the hon. Member for Dorset, South (Viscount Hinchingfbrooke) were all sincere, too. What is much more relevant than their sincerity is their good sense and the accuracy of their criticism.
It is no use my hon. Friend quoting the hon. Member for Shipley. He happens to be, from our point of view, an extremely reactionary gentleman who says that this is a dastardly agreement. He says that because he is a nineteenth century Manchester Liberal My hon.

Friend, who rejects that, cannot turn round and say "A Daniel come to judgment." I agree with him, but for totally opposite reasons, as did my hon. Friend the Member for Newton. We have to make our case in logic. The hon. Member for Shipley thinks the Bill is dastardly because he thinks that it is dastardly to use public money to interfere with the natural movements of the finance market, which left to itself will produce a heavenly result of profit and freedom for all.
That is why the hon. Member for Shipley thinks it wrong and, broadly, why the hon. Member for Dorset, South thinks it wrong and why the hon. Member for Kidderminster thinks it wrong, with complete sincerity but completely up a gum tree. Dr. Johnson said that when a madman comes into your house you should knock him down first and sympathise with him afterwards. I shall reverse that with the hon. Members of the Tory Party to whom I have been alluding. I shall sympathise with them first and knock them down afterwards, I hope.
I sympathise with them because they happen to be born into the wrong century. They are ardent believers in nineteenth century laisser faire capitalism, Trotsky said anybody who wanted a quiet life should not have chosen this period of history to be born in. He might have added that anyone who wanted to retain a naive and virginal belief in the benefits of the unfettered choice of laisser faire capitalism should have been born at least fifty years before any of those hon. Gentlemen were born.
It needs a fairly complex technical equipment to follow the argument which proves that the moon is not made of green cheese, but to prove that laisser faire capitalism in the middle of the twentieth century is a menace and a disaster to everybody, economically and politically, one would only need not to have been blind and deaf during the last twenty years. No technical equipment is needed. One has only to see the miseries and torments of unemployment, fascism and ultimately war, brought about because of the naive belief in the benefits of unrestricted laisser faire capitalism.

Mr. Deputy-Speaker: Order. The hon. Member pointed out earlier that a


Third Reading debate is confined to what is in the Bill.

Mr. Lever: Oddly enough, Mr. Deputy-Speaker—I am probably going on longer than the House would desire—the fact is, with great respect, that all I have to say has a Third Reading relevance in the sense that the Bill is a rejection of nineteenth century laisser faire capitalism. It is a rejection of almost every explicit doctrine preached by the Tory Party in all its propaganda. We have heard the agonies of Tory Members opposite, representing political anachronisms, museum pieces, chanting to themselves over and over again nineteenth century shibboleths which they think have the soothing and reassuring effect of a long remembered lullaby of childhood—why we should find any sympathy on this side of the House with those people I cannot for the life of me see.

Mr. Gower: Is it not true that, although my hon. Friend the Member for Kidderminster (Mr. Nabarro) may not understand the pragmatic approach of a post-war Conservative Government, it is also true that the Socialist Party does not understand why a Conservative Government is so pragmatic?

Mr. Deputy-Speaker: Order.

Mr. Lever: I am willing to admit at once that nobody can really understand the baffling contradictions, double-faced-ness, double-talking of the Conservative Party. The hon. Gentleman has made his point with great force.
Now I want to deal with the opposition from a much saner quarter than either the Government's denigration of their own Bill, or the peculiar utterances of the museum pieces of politics to whom I have referred. I must take into account the violent objection of hon. Members on my own side of the House to this Bill on the ground that it should have been on tougher terms and should have had an equity content. I will put it the other way round. The Bill does not make provision for an equity in Colvilles.
"Ah", say my hon. Friends, "£40 million of public money. True we get it back. True we get back the interest which the Government will have paid. Look at all these bloated profits going into private hands which the country

should have had." That I understand as a very reasonable sort of approach. The only thing is that I am not permitted on Third Reading to say what I would have done. The only point with which we are allowed to be concerned is the effect of the Bill as it stands. It is completely wrong to say that, as the Bill stands, the advance, economically and financially, which Colvilles will achieve will not in any way be shared in by the country. It is true that we could have had convertible debentures. But there is always one great unseen shareholder on every company's register, and that is the Government.

Mr. J. J. Mendelson: What a strange doctrine.

Mr. Lever: My hon. Friend says, "What a strange doctrine." I am prepared to face reality. If my hon. Friend sees anything inaccurate or distorted in what I am saying, let him get up and shoot me down. We cannot ignore the fact that if Colvilles' profits go up, half of them come to the Government.

Mr. Mendelson: That has nothing to do with it.

Mr. Lever: It is all right saying it has nothing to do with it.

Mr. Mendelson: What we were arguing, and what my hon. Friend is now distorting, has nothing to do with not having been present during the Committee stage, because he read the debate. He is distorting our argument that there will be increased profits accruing to the company and that the nation should have a direct share in those increased profits.

Mr. Lever: I do not think that my my hon. Friend was at his most charming when he said that I was deliberately distorting his argument. It may be flattering to my intelligence, but not to my morals. My hon. Friend adds to his charm with every intervention. Nevertheless, if he will listen to what I say I think he will find that I have not distorted the argument. I am dealing with the first part of the argument, and I will deal with the other part later. The argument is not that we could not have done a better deal. I would have done a better deal myself, and if you, Mr. Deputy-Speaker, would kindly allow me to do so on Third Reading, I would be


prepared to try to draft a much better Bill, which would give more benefits to the people.

Mr. Deputy-Speaker: The rules of the House forbid us learning that secret.

An Hon. Member: What would the hon. Member have done?

Mr. Lever: I thought I had made it clear. My hon. Friend only wakes up when he hears anything which jars on his preconceived prejudices. Apparently, he did not hear the first part of my argument, when I said that I could have done better than the Government have done. I hope that he is now thoroughly awake and will listen to this part of what I am going to say.
I have said, and I repeat, that it is true that the Government have not provided the benefits which a Labour Government would have provided. Nevertheless, it is not true to say that the people of the country will not share in any increased profits that result from this sheet steel mill. As has been said in a more august context—the hon. Member says he cannot understand me—I can provide him with an argument, but I cannot provide him with an understanding. The fact of the matter is that— blink away as much as we like—the hon. Gentleman wants more, and I do, and we might get it if we had a majority in the House of Commons; but we cannot blink away the fact that half of these profits will come to the people via the Treasury right away, and it is even more than that.

Mr. Lawson: Would not my hon. Friend agree that this does not apply to capital appreciation? If he bears in mind the fact that over the past two or three years this firm's equity shares have appreciated in Stock Exchange value by about £25 million, he will agree that not one penny of that £25 million will come to the Government in the shape of Income Tax.

Mr. Lever: The untaxed capital appreciation of shares occurs under a defective fiscal system conducted by this reactionary Government, which system I would long ago have abolished. It distinguishes between capital gains and revenue gains. I realise that my hon. Friend is quite right in saying that any

capital appreciation of the shares of Colvilles will not be taxed under the present law, but we are talking about increased profits resulting to the company—

Mr. Mendelson: I am now questioning my hon. Friend's hearing as well as his good sense. What I said was that the point he was making was completely irrelevant. What he says about accruing taxable revenue can be said about any private company that has not received any Government money. My hon. Friend is clouding the issue.

Mr. Lever: I will try once again, even at the risk of provoking another discourteous response to the courtesy which I have offered to my hon. Friend.
It is not true to say that no share of the increase in profits which might be said to result from the increase in production of the Colvilles sheet steel mill will come back to the Government or the people. Half of it will come back automatically. That is obvious. If my hon. Friend says that that can be said of any other company, that does not falsify what I have said. It makes no difference my hon. Friend thinking that my argument is irrelevant. Fortunately, the House allows all hon. Members to decide for themselves—myself and others —whether their arguments are irrelevant. I will give my hon. Friend something else which he might think is irrelevant.
Out of every £100 of Colvilles profit last year, £50 went to the Government and only £10 was paid to the shareholders. If that precedent is followed at something like the same rate, then, of the increased profits, for every £10 that goes to the shareholders, the Government may reasonably expect to get £50. If my hon. Friend now says that this also applies to other companies and, therefore, it is irrelevant, I cannot help that. I think that it is very relevant.

Hon. Members: Hear, hear.

Mr. Mendelson: Tory cheers.

Mr. Lever: I am not seeking Tory cheers. What my hon. Friend must realise is that an argument is right or wrong, and the fact that it is cheered by Tories or cheered by members of the Labour Party does not make it false or true. I beg my hon. Friend not to try to inject silly prejudice in addition to


he has been using for the last ten minutes in response to the courtesy that I have offered him in three interventions in five minutes.
It is absolutely false to say that, from this vast extension of the steel industry in Scotland, the nation will not share in the profits. We have a fiscal system—it does not go far enough and I should have gone further—which guarantees that the nation will have at least half of any increased profits arising from this development. It follows that the case for rejecting the Bill, on the ground that the nation will not benefit from the increased profits, fails. In the only speech on Second Reading which I found palatable, my hon. Friend the Member for Motherwell (Mr. Lawson) said that all Scotland wants this mill. How are we to get this mill? "Nationalise the industry", say my hon. Friends. If the industry is nationalised, we shall all be glad that this mill was built.

Mr. Mendelson: At no stage of the argument did we say that nationalisation is the only alternative. In Committee, we said that we must face the facts of life, but we said that it could have been done on very different terms with greater benefit for the nation. It is to that point that my hon. Friend must address himself, instead of setting up and knocking down Aunt Sallies.

Mr. Lever: I have already dealt with that point. Outside the sphere of nationalisation, Colvilles—and I regret it—does not take orders from the Labour Party. I would point out to my hon. Friend that it does not take orders from him, either.
I wish that Colvilles took orders from the Labour Party, and I very much wish that we had a Labour Government, but at the moment Colvilles is free to pick and choose whether it undertakes to provide a steel mill. As my hon. Friend the Member for Motherwell said, it is plain that unless the Government, in addition to the moral pressure which they appear to have exercised at the time, had not also offered Colvilles this money, Colvilles would not have provided a sheet steel mill in this area. All Scotland wants it there.
If the steel industry is subsequently nationalised, then we shall all say, on this

side of the House, that this was a good Bill, and we shall be glad that it was passed, because it means that instead of waiting for the anachronisms of modern finance, through their free devices, to provide the steel mill, which means ten years after the demand appears, we shall have provided it by social intervention. At no cost to the country we shall have put that steel mill there in good time to meet the needs of our economy. If the Labour Party is elected in the future and if the nationalisation of steel is one of our objectives, we shall be glad to think that we helped to provide this steel mill. My hon. Friend the Member for Penistone (Mr. Mendelson) will apologise to me and will say, "You were right and I was wrong, because we have a sheet steel mill which we should not otherwise have had".
It is no good my hon. Friend avoiding the argument. Colvilles is not beholden to him to set up a steel mill on his terms. It will set up a steel mill on its own terms, unless we have nationalisation. If there is no nationalisation and if we want Colvilles to run a sheet steel mill for us, then, disagreeable as it may be, we must give Colvilles the inducement which satisfies it—not my hon. Friend—and persuades it to start a mill.

Mr. Mendelson: We said that we welcome the extension of the steel industry and this location for the firm. I put it seriously to my hon. Friend that he must not ignore that fact. We said it on Second Reading.

Mr. Lever: There is no need for my hon. Friend to repeat the argument, which I have read carefully and rejected in some detail. I have dealt with the argument. He cannot will the end, which is a sheet steel mill, unless he wills the means. That is the kind of thing that we have often said before. The only means of getting Colvilles to run a sheet steel mill, unless we have a Labour Government, is to provide the firm with finance on terms which, in negotiation, it accepts.
The only question, therefore, is whether those terms are reasonable. I respectfully submit that they are. On the question of financial control—

Mr. Diamond: Before he leaves this point, will my hon. Friend direct his mind to the question whether these terms the silly, venomous little cat-calls that


are the most reasonable which could have been obtained? The rest of the argument is understood, but he has not attempted to deal with the main burden of the debate—apart from the question of accountability, on which he is about to speak—which is that these terms were nothing like the best terms which could have been obtained.

Mr. Lever: My hon. Friend asks me to deal with the argument that these are not the best terms which could have been obtained. So far, this remains an argument—a mere assertion which has been made. I have no reason to think that this is true. I cannot in all sincerity say that I am sufficiently aware of the circumstances to make a categoric statement, but, looking at all the evidence, it seems on the face of it that this agreement represents the best deal that the Government could have obtained from Colvilles. That is my sincere conviction. I do not think that the Government could have driven a harder bargain with Colvilles at that time.
I am not saying this to support the argument which the Government have adopted. It is a great pity, they say, that there was not more indication at the time of the reaction of horror and shock at the thought that Colvilles was to be financed by Government funds. I emphasise that it is not at Government "cost".
I beg my hon. Friend the Member for Newton not to talk about companies which undertake work of this kind, even for a Tory Government, as "going on public assistance." My hon. Friend does not realise that in saying that he is doing a grave disservice to the very ideals for Which he has always fought. If we want firms to co-operate with the Government, whether this or another Government, in the location of industry, in the planning of our economy and in the rejection of everything held dear by the hon. Members for Kidderminster and Shipley, then we must not go around insulting people who accept our offer and co-operate.
That is to put a premium on sabotage and on all the backwoodsmen. It means that all the decent, forward-looking, socially conscious business men will not be prepared to co-operate because they will know that they will be rewarded for their co-operation by cheap insults in the House of Commons. I say from these

benches—so that it may have been said from both sides of the House, and in the interests of the ideals which I have always held—that I beg my hon. Friends not to indulge in this form of comment unless they are abundantly satisfied that what is happening morally compels it from them.

Mr. Tom Brown: Mr. Tom Brown (Ince) rose—

Mr. Lever: I am not referring to my hon. Friend. He missed the occasion, when, to my regret, our Front Bench speaker referred to Colvilles as "going on public assistance". On that view, it follows that if the board of directors had told the Government to go to the devil when they said they wanted to negotiate for a steel mill, in 1957, they would have been gentlemen but now, because they have co-operated in this socially and economically desirable project, they are to be told that they are "going on public assistance". It does not help the prospect of an intelligent and flexible planning of our economy, which is expected, at any rate for a period, to be a mixed economy, to have that sort of comment made.
I want to deal briefly with the question of public accountability. There is no need to be anxious about it. This Bill is not like the Cinematograph Film Production (Special Loans) Act and other atrocious Measures which have been introduced. This is a straightforward loan, openly declared. Unless I have misread the documents—and I hope that the right hon. Gentleman will correct me if I am wrong—not a penny has been paid, and not a penny will be paid, until Parliament passes the Bill. I do not know what it is that terrifies my hon. Friend when he talks about throwing £12 on the Floor, followed by £120 million on the Floor. I do not follow it.
Not a farthing is being paid until the House has had the most detailed debate on the subject—much more detailed than would have been the case on the Consolidated Fund. There has been a Second Reading, Committee stage and Third Reading. Everybody has been entitled to "pile in" and discuss it. Before a penny of this money is paid, it must be authorised by the House. It will not be paid until the House has sanctioned the Bill, as I am confident it


will. If the hon. Member for Kidderminster were in his place I would relieve him of his anxieties about this.

Mr. Nabarro: I am here.

Mr. Lever: I am sorry that I missed the hon. Member from his accustomed place. I am glad to see him here; it is always encouraging, and in a way inspiring, to see him. He will be glad to know that I am so convinced of the merits of the Bill and so little terrified about the question of accountability that I think that the Bill will have a Third Reading and I will vote for it. It is not a case in which we have debated the Bill before we have known where the money is going. It is going into a loan to Colvilles. I am not dealing for the moment with the Richard Thomas and Baldwins part of the Bill, but with that part dealing with Colvilles.
Nobody questions the probity and financial stability of Colvilles, and there is, therefore, not the slightest doubt that we shall get the money back. In those circumstances, I cannot see why we have all the fuss over public accountability. The House will decide tonight in favour of the Third Reading, with me in the Division Lobby in favour of it, if necessary.

Mr. Nabarro: Is the hon. Member with me?

Mr. Lever: Yes. but I shall do it because I approve the purposes of the Bill; not because I have deliberately misled myself by misguided arguments. I shall go into the Lobby because I believe in the Bill and because, like my hon. Friend the Member for Motherwell, I believe that all Scotland is in favour of the Bill. All Scotland is in favour of it because it thinks that it will benefit immensely by the Bill. Scotland also thinks that it is urgent. It will provide additional work in the area of the sheet mill, to absorb existing unemployment. We must also bear in mind the problems for the technically-skilled men in the area. The steel industry is growing. Unless we take more industry to this area we shall have even further unemployment because of the displacement of workers, from existing industry due to improvements in technique.
The Bill is urgent and it is sensible. Of course, the Government dare not

sing its praises or there would be a row on the Government side of the House. The Government had to come to the House piano and to play down the Bill saying, "It is one of those unfortunate things resulting from the fact that the Labour Party had put everybody in such a tangle". In the words of the popular song, the Government could say, "I try to be good, but the boys won't let me." The leading quartette of the Government could sing that song with some justification. They are forward-looking men. The trouble arises from the mixed bunch of political delinquents behind them, always dogging them and inhibiting their possibilities. When they have an enlightened moment, and do something contrary to the Tory doctrine, they must play it down.
We must not be misled into supporting the most stupid, reactionary members of the Conservative Party, who rightly claim that this Bill follows in the whole tradition of the Labour Party.

Mr. Nabarro: That is what I object to.

Mr. Lever: Precisely. The real objection, and why they think that the Bill is dastardly, is that they think it follows strictly in the path of Labour ideas, which is to reject the concept that we can have a free-for-all economy, with no Government intervention and with no planning, ignoring social considerations altogether. This Bill will reject that concept—a concept which is essential to Tory doctrine.
The Government dare not declare this, because of their followers. I have said that I am sorry for their followers. They have had a bad time. They have not even been able to reintroduce flogging and birching. All they have had is a Labour economic policy. Who knows what will happen next? We might have a tax on capital gains next week, when the Chancellor introduces his Budget.
I have trespassed too long on the indulgence of the House. I think that the Government have unfairly denigrated their own progeny, for political reasons. I think that some of my hon. Friends have been wrong and have overstressed the inadequacy of the terms of the loan. I am not saying that they could not have been more favourable to the country, but there is no evidence that they could have


been more favourable with a Tory Government in power, though, on the face of it, they look reasonable and fair. The net result of the Bill is a great gain in terms of economics and finance, at no financial cost to the Government. Perhaps the greatest gain of all is that the Tory Government have been forced to abandon their own most cherished doctrine of the advantages of laisser faire capitalism.

6.31 p.m.

Mr. Stanley R. McMaster: I have listened a long time to the discussions on this Bill, both on Second Reading and in Committee, and I have been here all through this debate, but I have listened with no greater interest than to the speech of the hon. Member for Manchester, Cheetham (Mr. H. Lever). He would make an ideal Young Conservative. Unfortunately, his ideas are not in keeping with those held by other Members of the Opposition. I find them very similar to my own, however, and I must therefore say a few words in criticism of what has been said by my hon. Friend the Member for Dorset, South (Viscount Hinchingbrooke) and my hon. Friend the Member for Kidderminster (Mr. Nabarro).
We have come a long way from laisser faire economy. It is a thing of the past. We in the Conservative Party pointed out in our manifesto that we wanted a planned economy. We have a new conception today of the duties and responsibilities of Government. I saw a glimmering of light in the speech of my right hon. Friend the President of the Board of Trade, when he referred to our duties to Scotland and Wales. There are areas in this country, such as Scotland, Wales and Northern Ireland, which are plagued by heavy unemployment.
My right hon. Friend mentioned that without the new strip mill in Scotland other industries which have gone to Scotland to help to alleviate unemployment would not have gone there. One of the main functions of Government is to avoid this terrible wastage of unemployment—not only in its social effects but in its loss to the economy. I therefore support the Third Reading of this Bill because I believe it is the Government's duty to plan for expansion and prosperity.
Companies such as Colvilles and Richard Thomas and Baldwins should not be tied too strictly to the money market. They should not be tied to temporary fluctuations in trade. We want capital expenditure in the economy to be spread evenly. We want to avoid the cyclical unemployment in capital goods industries which was the curse of the nineteenth century and of the first forty years of this century.
An important contributory factor to the recurrent cycle of boom and depression, which resulted in such heavy unemployment in this country, particularly between 1925 and 1935, was the difference in investment in the capital goods industries. Certain firms need large sums of money to invest from time to time, such as steel firms and others in coal, railways, aircraft, shipbuilding and nuclear power. All these firms are investing in capital expansion. They cannot depend on the stock market, because the stock market, which performs a very useful function in private industry, suffers from certain natural limitations. It depends on many investors, both small and large, and the day-to-day success of new issues depends on the psychology and the outlook of these small investors.
The hon. Member for Cheetham said that Colvilles' management was in some doubt as to whether to expand or not. It often happens—it did before the war —that the owners and managers of an industry are in doubt as to whether or not to expand from time to time. Their decisions based on their estimate of future demand and on the price which they have to pay for the money they borrow can be wrong. As a result, much of the investment in this country before the war took place during a boom, and that meant heavy unemployment in the capital industries during the slump, because there was next to no employment in shipbuilding and steel. That caused depression in consumer industries which was reflected throughout the economy.
The Conservative Party has long ago left the ideas which my hon. Friend the Member for Dorset, South and my hon. Friend the Member for Kidderminster would have liked to impress upon the Government. It has been said today that the reason why my hon. Friend the Member for Kidderminster was going to vote in favour of the Bill, and the reason why


the Government were introducing this Bill, was sanctity of contract. I would like to think that there were wider reasons behind the presentation of the Bill than sanctity of contract. The debate itself was full of such platitudinous remarks as "State paternalism". That slogan, like many others, is full of prejudice and has next to no logic in it.
I therefore commend this Bill because I firmly believe that it is a function of Government, as we see it, firstly, to help to avoid unemployment; secondly to ameliorate the hardship that unemployment causes; and thirdly, to prevent the wastage of vital economic resources and manpower which arises from changes in trade and produces uneven unemployment and depression in certain areas. Finally, I would also agree that even though the Government do not take a direct financial or equitable interest in industry—and that may not be their function; I do not believe it is myself— nevertheless they have a social interest, and the Treasury has a direct interest, in the success of all British industry. The Bill is correct in its purpose, and I support it.

6.37 p.m.

Mr, George Lawson: The hon. Member for Belfast, East (Mr. McMaster) is a rather interesting example of the denizens of the party opposite. I presume that as a good Conservative he preaches the virtues of free enterprise, yet as a Member for a Northern Ireland constituency he very well recognises that free enterprise cannot meet the problems of his area. He therefore supports his Government in measures that transcend private enterprise. I do not know whether he sees a contradiction in that what he preaches he does not praotise. That is the difficulty also for this Government. It is the difficulty that has been present in our debate today, during the Committee stage and on Second Reading.

Mr. McMaster: I see no conflict in what I said. I see a wedding between private enterprise and State assistance. I referred to large firms—such as those in steel and nuclear power—which need more money, particularly at certain times, than the ordinary economy can provide, but, by and large, of course. I

approve of private enterprise. Here in the steel industry we get the wedding between State assistance, when required, and private enterprise, which makes a strong economy competitive.

Mr. Lawson: In the last few years the steel industry has been boasting of its ability to stand on its own legs. It has been mooking State intervention and nationalisation. I come back to my original point. I support the Bill for reasons which I have given previously, but I want also to expose the contradictions of hon. Members opposite and the Government. The Government went to the country on the basis that free enterprise was best. If the Conservative Party does not believe in free enterprise, what does it believe in? It is difficult to know. The hon. Member for Kidderminster (Mr. Nabarro) was right to say that this was a matter of Conservative philosophy. He was very troubled about the Bill because of its direct clash with Conservative philosophy. All the difficulties which we have had in our discussions have stemmed from the fact that the Government do not practise what they preach.
For Scotland, the Bill is a very good thing. If my hon. Friend the Member for Gloucester (Mr. Diamond) were in his place, I could point out to him that for Scotland it is a very good thing that the Government are to practise other than they preach, because, like Northern Ireland, in many respects Scotland is in a bad way. Northern Ireland may be in a worse way than Scotland, but Scotland is in difficulties primarily because of the failure of free enterprise to meet Scotland's problems.
The endeavour to establish a strip mill in Scotland is one of the means by which, through Government intervention, we hope that Scotland will once again be brought into line with developments south of the Border. If anything is obvious—and I repeat this with all the emphasis at my oommand—it is that there would have been no suggestion of a strip mill for Scotland but for Government intervention.
Several hon. Members, including my hon. Friend the Member for Manchester, Cheethann (Mr. H. Lever), have said that in some respects Colvilles is a firm which we should highly respect.

Mr. H. Lever: I do not know whether Colvilles should be respected. I know that Colvilles is solvent, and I made that point. Secondly, I know of nothing which it has done in this connection which warrants it being subjected to insults, such as being described as taking public assistance.

Mr. Lawson: I accept that, but it might be useful to recall that the strip mill was suggested early in 1957 and the first proposal was that it should go to the Grangemouth area, a proposal which Colvilles opposed at that time. I am not saying that the strip mill would have gone to the Grangemouth area, but it seems that Colvilles did not want Richard Thomas and Baldwins in Scotland. It may have been that the latter firm would have provided competition for Colvilles' labour and given Colvilles' workers a much stronger bargaining position than they now have, since there is practically no other firm to employ them. However, Colvilles did show it was hostile to the establishment of a strip mill. I have said that in the House before, and I have said it in my constituency and I wrote it in my election address, so I have made no attempt to hide it. It is perfectly clear that Colvilles was approached by the Government and induced by the Government and bribed by the Government to do that which Colvilles at that stage said it was not very keen to do.
I think that Colvilles is now very keen to go ahead with the idea, and I welcome the discovery with zest to go ahead with the strip mill and hope that Colvilles will make a first-rate job. Colvilles is most efficient about producing steel, but it can be seen that the difficulties which we have had all stem from the fact that in Scotland free enterprise in steel has been letting the nation down.
Only a few years ago, Scotland regularly produced 15 per cent. of all the steel made in the United Kingdom. We are now down to a little more than 10 per cent. Year after year there has been a progressive drop in the proportion of steel produced in Scotland. What is true of the steel industry is true of many others.
Scottish Members have urged the Government to intervene, and we shall continue to do so. We believe that there will have to be much more intervention,

and all my Scottish hon. Friends are solidly behind granting money to enable this venture to go ahead. We tried to make reservations, and I tried to put my point of view in Committee. However, that point of view was rejected and we are now left with the alternative of supporting or opposing the Bill as it now stands. There is no doubt among my hon. Friends—we believe that the Bill must now be passed as it is, and we shall give it our whole-hearted support.

6.46 p.m.

The Minister of Power (Mr. Richard Wood): Since I moved the Second Reading of the Bill about five weeks ago, from time to time I have had cause to think of amending the description which I then gave it. I said at the time that this was a small accounting Bill. For a small accounting Bill, it seems to have led to a great deal of discussion.
I want to deal with the very remarkable speech of the hon. Member for Manchester, Cheetham (Mr. H. Lever) and to say that I have no shame or apology to make for the Bill. I do not know how he detected that my right hon. Friend the President of the Board of Trade or I had any such shame. As the hon. Member for Motherwell (Mr. Lawson) said, the Bill will be of great benefit to Scotland, and I make no apology for it whatsoever.
It might be useful if I said something about the background of the Bill, to which my right hon. Friend referred. There seems to have been a suggestion that from time to time my right hon. Friend and I have made inconsistent statements. It has been clearly known for some time that the Government have been anxious to have a strip mill in Scotland. After discussions among the Government, the Iron and Steel Board and the industry, Colvilles came forward with a proposal to provide capacity in Scotland, so long as financial assistance was available on terms which would make that new development an economic proposition, taking account of the risks involved—and I want later to return to the risks involved for Colvilles at that time.
A misunderstanding seemed to develop between the hon. Member for Newton (Mr. Lee) and myself about the heads of agreement and the drawing of the loan. The heads of agreement state


that the company may draw once in each period—that is, once in six months—but the amount to be taken in each period depends on the needs of the time. That is the purpose of the relevant head of agreement, and the operative word in that definition is "may". The company has eight chances—that is what it comes to—to draw the loan. It need not draw in eight bits, but the heads of agreement provide that it must not draw more than once in every six months, and it goes without saying that the company need not draw up to the maximum of £50 million.
The financing of the other loan, that to Richard Thomas and Baldwins by the Iron and Steel Holding and Realisation Agency, was raised by the hon. Member for Newton and by my hon. Friend the Member for Kidderminster (Mr. Nabarro). On other occasions, I have explained that I do not believe—and in Committee I quoted the relevant part of the 1953 Act—that the Agency was created for the purpose of financing these kinds of developments. It was created to finance such developments as would assist in the disposal of the companies still owned by the State. Therefor, I do not believe, and I repeat what I said before to my hon. Friend, that it is the purpose or the function of the Agency to finance major new developments of this kind.

Mr. Lee: I am grateful for what the Minister said about the agreement. It is most remarkable that we talk about there being eight tranches, when apparently the company can draw the whole thing in one tranche. Because of what the Minister said, is there any point in saying that there shall be eight tranches? Why not two, or one? In other words, it could get it all at once if it wished.

Mr. Wood: The point I tried to explain is that the company cannot draw two lots of money within six months. I imagine that the tranches will begin to be drawn some time in the near future, and they will continue for the rest of the period. That is the position. I want to make it clear that there is no specification in the heads of agreement that the tranches must be equal. They can vary by considerable amounts, but they would not do so because of the continued flow

of the work, and the money would be drawn when it was needed. Therefore, the company would draw the money it needed in 1960, 1961 or 1962, at that time, and it would draw the money it needed later at a later date. I do not think that that is a very remarkable position.
A number of hon. Gentlemen have questioned the terms which were reached between Her Majesty's Government and Colvilles when they came to the agreement at the end of 1958. It is impossible to be dogmatic, but having made inquiries and looked closely into the matter, I am convinced that the terms— and I think I have the support of the hon. Member for Cheetham—were the best deal possible for the Government at that time, although that is open to argument. There is no way in which that kind of statement can be proved. I state my convictions, and I remind the House of what has occasionally been forgotten in this context, the considerable risk and the different atmosphere in which this deal was concluded in 1958.
I think I said this at an earlier stage. I am convinced that if things had gone differently, and if the state of the market had not moved as it has in the last two years, we should have had very little criticism of the Bill. I hate to say anything rude to the hon. Member for Gloucester (Mr. Diamond) after the kind things he said to me, but occasionally we have found him guilty—and I think my right hon. Friend found him guilty at an earlier stage—of tending to want the best of both worlds, or, in a more topical phrase, trying to back his horse after it has got past the post. I believe that the criticisms which have been made were made because of the great change that has taken place—and I admit it has —between the conclusion of this agreement and the present time.
The hon. Member for Gloucester made some serious charges about breach of faith. He suggested that my predecessor had committed some breach of trust or faith by using his powers under Section 5 of the 1953 Act for this purpose. Perhaps his recollection of this is clouded, but I think he will recall, or he can discover if he is so minded, that the Opposition at the time of the passage of the Iron and Steel Bill—and this point was made by my hon. Friend


the Member for Barry (Mr. Gower)-was most anxious to give greater powers to the Minister to provide and use facilities or make arrangements for the provision or use of those facilities, if he was convinced that the capacity was likely to be greater in the future.
The hon. Gentleman's case seems to be that the Government ought to have asked for approval before the agreement was made and it was rather immoral of them to use these powers. I think that is what the hon. Gentleman said, but not before eighteen months had elapsed since the conclusion of the agreement. I apologise for reminding the House, but the fact is that although Questions were asked about this agreement at the time, when it was announced there were no murmurs of disapproval until the introduction of the Bill.
The hon. Gentleman suggested that my right hon. Friend and my hon. Friend were guilty of "shifty replies", and my hon. Friend the Member far Kidderminster used the word "artfulness" to describe my right hon. Friend's reply.

Mr. Diamond: He used that word to describe the Government Front Bench.

Mr. Nabarro: I said that the President of the Board of Trade was "artfulness personified", and that my right hon. Friend the Minister of Power was "extremely artful" in the way he had contrived this. May I correct my right hon. Friend at once? He is wrong in telling the House that there was no murmur of dissent about these steel matters. He has not referred to my three Parliamentary Questions to the Chancellor of the Exchequer on 26th January, long before the Bill came in, expressing the strongest disapproval about the antithesis of denationalisation and the fact that we were investing more and more State money in steel instead of denationalising.

Mr. Wood: I take my hon. Friend's amendment of the word "artfulness," but it is still fourteen to fifteen months, even if I take into consideration the trenchant Questions he put to my right hon. Friend. There was a long interval between the conclusion of the agreement and those trenchant Questions.

Mr. Nabarro: I have continuously asked Questions about this. I did not

want to embarrass my right hon. Friend in holding his seat in Bridlington at the General Election by suggesting that he was not pursuing denationalisation as quickly as I would have liked. That would have embarrassed him too much.

Mr. Wood: I thank my hon. Friend for not embarrassing me at the election.
I have analysed the "shifty" or "artful" replies since the hon. Gentleman made these charges. I think there was also some suggestion that some statements made by my right hon. Friend did not concur as closely as they should have done with statements made by my hon. Friend. I cannot find anything contradictory in them. They seem to be good examples of the many-sidedness of truth.
There has been a lot of discussion this afternoon about the sanctity of contract. I was pleased to hear my hon. Friend the Member for Belfast, East (Mr. McMaster) say that in his view there were wider reasons for supporting the Bill than the sanctity of contract. That ties in with what I said at the beginning of the Bill, that this is a good Bill because its effects are not only socially desirable but will be economically beneficial to this country.
The hon. Member for Gloucester disagrees with my hon. Friend the Member for Kidderminster about the sanctity of contract. The hon. Gentleman believes that a vote against the Third Reading of the Bill, or a vote at some other stage of the Bill—and this is where he came into conflict with my hon. Friend—is not a vote against the sanctity of contract. He spoke eloquently, and to a certain extent convincingly, but I would remind him of what I said at an earlier stage, that, apart from the method of the Agency financing these loans, which I have rejected for other reasons—and I hope that the House agrees with me— this money, once agreed, can be provided only in two ways. The first is by the method chosen by the Bill, and the second would be by leaving it where it began last year, on my Vote.
The arrangement of putting this money on my Vote, which would completely swamp my Vote and make it entirely top-heavy, certainly would be to make possible the yearly examination of this arrangement. My right hon. Friend the Home Secretary has, however, promised


to give time, not only to consider the report which I am obliged by the Bill to make, but also to consider reports that I might make on any variations that might take place in the loan. Therefore, to scrap the Bill and to place the money back on my Vote would make absolutely no difference to the terms of the agreement. There is no doubt between us there.
Therefore, if the hon. Member carries his protest to the extent of a vote, it will mean either that he wants the money placed on my Department's Vote or that he is fundamentally in disagreement with the terms of the agreement itself. I do not see any benefit to the House in placing the money back on my Vote, nor do I believe that that is the objective of the hon. Member himself. Therefore, I cannot see how the sanctity of this contract can be preserved, except by the method that we have chosen under the Bill.
I have given the undertaking at an earlier stage that there will be no application elsewhere of this money—that is, to no other firm but Richard Thomas and Baldwins and Colvilles. As my right hon. Friend the President of the Board of Trade said when moving the Third Reading, our legal advice is that I would be prevented from reissuing any sums of money which the Treasury might have received back and then issued to me for other purposes. Therefore, I do not see that there can be any doubt whatever, if my undertaking is accepted, that the loan is arranged and will be used only for the purposes which I have stated—to assist Colvilles and Richard Thomas and Baldwins to do the jobs which we have set before them.

Mr. Diamond: The undertaking which the right hon. Gentleman is now giving is a material one. Does it apply not only to any variation of the agreements with the two proposed borrowers, but to the extent that if any part of this money is not loaned to either of those two borrowers—and it is contemplated that it might be so loaned because of the revision in 1962—it will not be loaned to any other borrower in any circumstances whatever without application being made to this House?

Mr. Wood: I can give that undertaking quite clearly. If, for instance,

only £90 million of these loans were drawn by the two companies, there is no question of using the unexpended £30 million for other purposes. Therefore. I give that undertaking clearly.

Mr. H. Lever: Would it not save a lot of trouble and argument if these undertakings, instead of being given at the Dispatch Box at the last moment, had been written into the Bill in plain English? That would have pleased many of my hon. Friends and would have saved a good deal of time. I am not casting any doubt on the right hon. Gentleman's undertaking, but we should not have to rely on a verbal undertaking by a Minister that he will not embezzle the money. It should be written into the Bill.

Mr. Wood: The Second Reading debate had lasted only seventeen and a half seconds before I gave that undertaking. Therefore, it was given as early as possible, and the hon. Member has kindly said that he is willing to accept it.
To summarise, the contracts, which have been the subject of a great deal of argument for almost three days, were made under Section 5 of the 1953 Act, under the powers which the House then gave me, and the contract was announced to the House. The hon. Member for Cheetham said that the argument that there had been little criticism between that announcement and the present day was an irrelevant one. Therefore, I shall not dwell on it again.
Before the Bill appeared, £1 million appeared on my Vote for 1959–60 in order to honour the beginning of the contract if it should become necessary. The only reason for the Bill—which, I remind the House, is a small accounting Bill—is because it was considered inconvenient and inappropriate for large sums to remain on my Vote. Therefore, we have the Bill to bring these sums below the line. It gave to the House—I make no complaint about this, because I have learned a great deal in the course of the three days—an opportunity to criticise in the circumstances of 1960 the loan agreement, which not only was not criticised in the circumstances of 1958, but was warmly welcomed, particularly by hon. Members who represent Scottish constituencies. It is only right that we should try to cast our minds back to


1958, and if we may again, in the words of the hon. Member for Cheetham, look at it in the light in which it appeared then, we shall see that the contract was, on the whole, very beneficial to make. The only purpose of the Bill is to honour that contract. Therefore, I ask the House to give it a Third Reading.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Orders of the Day — GAS [MONEY]

Resolution repotted,

That, for the purposes of any Act of the present Session to increase the amount which may be borrowed by the Gas Council and Area Boards under the Gas Act, 1948, and to amend that Act with respect to the expenses of the Minister in connection with the testing of gas for compliance with standards prescribed under that Act, it is expedient to authorise such increases in the sums which by or under any enactment are to be or may be charged on or issued out of the Consolidated Fund raised by borrowing, or paid into the Exchequer as may result from provisions of the said Act for increasing up to five hundred and twenty-five million pounds, in the case of borrowings before the end of March, nineteen hundred and sixty-six, the limit imposed by subsection (3) of Section forty-two of the Gas Act, 1948, upon the aggregate amount outstanding in respect of borrowings by the Gas Council and Area Boards.

Resolution agreed to.

Orders of the Day — GAS BILL

Considered in Committee.

[Sir GORDON TOUCHE in the Chair]

Clause 1.—(EXTENSION OF BORROWING POWERS.)

7.10 p.m.

Mr. William Blyton: I beg to move, in page 1, line 15, at the end to insert:
Provided that none of the additional moneys authorised to be borrowed by virtue of this subsection shall be applied for the purpose of the purchase, importation, or distribution of liquid methane gas.
We put down this Amendment to elicit information, rather than from the point of view of opposing the Bill, because of the apprehensions which exist particularly in the coal industry. During the Second Reading debate the Minister referred to the importation of liquid methane on a commercial scale and said that critical examination would be given to such proposals.
We are worried about this development. We should like to know what amount of the money to be borrowed is to be devoted to building bigger shins to be used for the importation of liquid methane, and what will be the effect on the coal industry. A short time ago there was talk among important people in the gas industry of ships of 20,000 tons to be used to carry liquid methane to this country. That statement was made during the election by the then Chairman of the Gas Council. Such a policy would lead to a huge reduction in the consumption of coking coal. At present we are faced with the closing of 240 pits in a period of five years, and I remind those hon. Members who favour licences for private mine owners that such owners would have to carry some of that burden.
The County of Durham produces gas coal. There, under existing conditions, the manpower in the coal industry is to be reduced to about 70,000 by 1965. If, in addition, we have to face the possibility of liquid methane being allowed to come into the country in the proportions which are envisaged, the position will be worsened. In Durham there are large modern collieries on which thousands of pounds of capital have been expended. They have a hundred years'


reserve of coking coal. The production at those collieries will be affected if the contemplated imports of methane are sanctioned, and the manpower will be still further reduced. The coal will be left in the ground and our miners will be unemployed.
The collier trade has faced bad times because of the competition from oil and it will receive a further blow if liquid methane is imported into this country. The collier trade on Tyneside and Weir-side will be affected and there can be no hope of ship owners building coastal vessels if the future trade for such vessels is taken away.
Again and again I have raised the question of the ever increasing importation of fuel which makes us dependent on imported fuel while our indigenous fuel remains under the ground. I believe that policy to be dangerous both from an economic and a strategic point of view. It should be the duty of Parliament to see that we make the best use of our own resources. We fear that the sum mentioned in the Bill includes an amount of money to be devoted to the future development of liquid methane imports. I say to the Minister that such a policy is a death sentence on the Durham coal field, and that many people now employed in the gas industry will become unemployed.
7.15 p.m.
It is argued that liquid methane must be imported in order to enrich our gas, but is that really the case? Or is it that the Gas Board wishes to use the possibility of importing liquid methane as a threat to induce the Coal Board to sell coal at uneconomic prices? I have heard experts in the gas industry say that they want a free choice to enable them to buy in the cheapest market, because they consider the price of coal to be too high. I heard of that policy years ago when it was described as a cheap fuel policy and it caused distress and havoc in my county. Can the Minister tell us whether any of the money is to be spent on the building of ships designed to be used for the importation of liquid methane on a far greater scale than at present?
The Explanatory and Financial Memorandum to the Bill indicates that the Minister has considered the pro-

gramme of expenditure of this money. Can the right hon. Gentleman tell us whether any of the plans envisaged will result in a further contraction of the coal industry in Durham because of the importation of liquid methane gas on a large scale? We have put down the Amendment because we apprehend that the future for coal will be bleak, and the further importation of liquid methane will worsen the position. This is a "bread and butter" question for the people who work in the mines in Durham, and therefore I seek an assurance from the Minister on this point. Our job should be to ensure that our own coal is used. I should be grateful if the Minister, with his knowledge of the schemes involved, will allay our fears or give us some information on the point.

The Minister of Power (Mr. Richard Wood): I listened with interest to what was said by the hon. Member for Houghton-le-Spring (Mr. Blyton). He said that the Amendment had been put down, not because of any opposition to the Bill, but to get enlightenment. I appreciate his attitude, and I hope to be able to provide the enlightenment for which he asks and remove the fears which he has expressed so that there will be no need to carry this Amendment to a Division.
I understand very well—indeed, I said so on Second Reading—that apprehensions may be entertained by a number of hon. Members about the possibility of the importation of liquid methane. I certainly understand those fears as expressed by hon. Members who represent Durham constituencies. The position regarding coking coal in that county is one which we are watching with immense care. Anything which may have a considerable effect on the demand for coking coal must cause apprehensions in the minds of hon. Members who represent Durham constituencies.
I tried to express my views on the matter during the Second Reading debate. I hope I shall not go over too much of the same ground now in giving to the hon. Gentleman the answers which appear to me to be convincing in the present circumstances, and in the absence of any demand from the gas industry for these importations of liquid methane on anything but a trial scale.
First, I ought perhaps to draw the hon. Gentleman's attention to page 5, paragraph 6, of the Gas Council's brochure, "Gas Looks Ahead", the last two sentences of which says:
It is impossible to say accurately how the present plans of Boards will require modification should new supplies of gas and methods of production begin to be introduced in conjunction with a National Grid".
These are all possibilities which I mentioned in my speech on Second Reading. The last sentence of that paragraph states:
Any such modifications would fall within the later years of the present programme, and an amount of £25 million has been included to allow for them but has not been allocated to any particular Board.
The Committee will appreciate that proposals of this kind, which the Gas Council may make to me in connection with the possibility of importing liquid methane are similar, although not the same, to the unknown proposals which it may at a later stage have to bring before me in connection with such things as a national gas grid. For the moment, I must direct my attention and that of the Committee to the possibility of these imports being proved to be economically beneficial and to seeing whether, in fact, there may or may not be a case for them.
The hon. Gentleman has suggested to us that these imports would definitely reduce the demand for coking coal, and he has gone so far as to say that they would be the death sentence of the Durham coalfield. For various reasons, I cannot agree with such a summary judgment. I can see a number of situations in which, as I think the hon. Gentleman would agree, the importation of liquid methane would not necessarily lead to a corresponding reduction in the use of coal.
First, there is the possibility that methane may be a source of very cheap gas. That will at least be agreed as a possibility by all hon. Members. This would be to the great advantage of the gas industry. Methane would also introduce the advantages of being free from sulphur and carbon monoxide and, in so far as it created a genuine new demand in these ways, it would not be detrimental but actually beneficial to the coal industry. That is the first reason why I believe the hon. Gentleman's judgment is too summary to be wholly true.
Secondly, these imports, if they took place, would be very largely used to meet the peak load or other requirements. This peak load and the other requirement which I have in mind are normally, as the hon. Gentleman knows, supplied by carburetted water gas or oil gas. Therefore, if methane imports replaced them they would not be replacing coal but replacing oil, and that, I think, from the point of view of the coal industry would also be beneficial.
Thirdly, there is the important consideration which the hon. Gentleman mentioned of processes of total gassification, such as Lurgi, which produces lean gas and which needs enrichment either by methane or some other enricher. Therefore, methane in this case would seem to me to be likely to help to maintain the existing markets and possibly increase them for gas made from coal.
These are the arguments which, in my opinion, entitle me to take a perfectly open view at this moment of the possibilities of methane gas. But as I said in the debate on Second Reading:
The appraisal of this experiment … calls for a very high degree of critical care. It may be some time before the Gas Council puts its proposals to me. When it does so, I undertake to examine them urgently and to report to the House as soon as I can."— [OFFICIAL REPORT. 8th March, 1960; Vol. 619, c. 253.]
If after such examination—which I should certainly do with all the claims of the coal industry and all the matters to which the hon. Gentleman has drawn our attention tonight in mind—it becomes quite clear that liquid methane gasified in a particular area could have substantial economic advantages, I am bound to admit I should then find it profoundly difficult to justify refusal to use it and a decision to use indigenous resources, as the hon. Gentleman suggested, regardless of cost in a nation such as ours, which is bound to exist, live and thrive on international trade.
I have given an undertaking, and I hope I can convince the hon. Gentleman that it is with great sincerity, that the whole future of the coal industry and of the gas industry, which is very important to the coal industry, is bound to be taken into consideration if and when such proposals as we are considering at the moment are made to me. I believe, as I said on Second Reading,


the criticism of liquid methane at any price viewed the matter too narrowly. If, in fact, methane led to a rejuvenation and a new lease of life for the gas industry and assistance to the gas industry, as I believe it may, it may not be detrimental but actually beneficial to the coal industry.

Mr. Frederick Lee: We are grateful to the right hon. Gentleman for his careful answer to the case which my hon. Friend the Member for Houghton-le-Spring (Mr. Blyton) placed before him. It is, of course, quite natural, if the quantities of coal which the Gas Council will be using are reduced from 65 per cent. to 55 per cent. in a few years, that my hon. Friends, from the Durham area especially, and, indeed, from the whole of the coalfields, are worried as to where this process will eventually lead us.
There are even wider considerations than that. I recently listened to experts discussing world fuel supplies. One expert opinion assesses the amount and. indeed, the life of natural gasses as very short indeed. They believe that the exhaustion of world supplies of these gasses is going ahead at a very great pace. If that is so, it would be a great mistake to base our future planning development within the gas industry on a type of fuel which may quite speedily not be available to us.
In contradistinction to that, we also have the fact that when we look at efficiency in coal burning it is the case that that efficiency has gone ahead far more rapidly in the last decade than in any other period since we have had a mining industry. Therefore, following that case at the moment, it appears to be an easy way out of our problem to import methane, but we may well be overlooking the long distance view, which may be a complete inability to get such gasses because of the rate at which they are now being exhausted, the relatively low supplies in the world and the increased efficiency with which we can now use coal.
One sees, for instance, in the United States that there are very big increases of coal-burning in the power stations which are now being placed nearer to the coalfields. This kind of development may, in some strange way, bring us back

to the point where, given a continuance of these developments, there could be very little doubt that coal for the production of electricity, gas and so on would be a far better economic proposition than many of the new ideas for replacing coal.
7.30 p.m.
When we look at the fact that shortly there will be such a terrific call on the world's fuel power supplies as other nations become manufacturing nations, it is as well to remember that at the moment one-third of the world's population is using seven-eighths of the world's supply of power. I follow the point made by my hon. Friend that in this connection we have one indigenous product, coal. We all know that as mechanisation increases throughout the world it will not be possible for such a relatively small proportion to burn up so large an amount of the world's power supplies. We may be investing in types of fuel which will no longer be available in a relatively short space of time. In that wider setting we also have to deal with problems of the gas industry.
The right hon. Gentleman gave what information he could on the question of the importation of methane. I take it that he does not yet know whether it is considered to be an economic proposition. We should like to know whether he has yet received any plans of any type from the Gas Council. For instance, does he know of any efforts to replace the methane "Pioneer"? How many voyages have taken place so far? Is it contemplated that there will be boats of greater tonnage than the methane "Pioneer" to make the importation of methane a more economic proposition? One hears this and that on this subject. In the coalfields the stories go around and cause very considerable apprehension among coal miners, who very naturally are worried about this matter.
If it is possible, either now or in the immediate future, to give us further information as to the state now reached by the Gas Council on the question of building larger ships or anything of that type, although it would be bad news if the right hon. Gentleman said that was to be done, nevertheless we would far rather know the position than have the present apprehension.
I hope the Council itself will be seized of the fact that there is this enormous increase in the efficiency with which we are now able to burn coal and that there are dangers of what may now look a rather fanciful modern scheme in a short space of time turning out to be not what it appears. My information from scientific sources is that natural gas is now being used at such a pace that, in comparison with the amount of gas reserves, it cannot go on for a very long time. If that is so, I would have thought it a far better proposition to invest more in our home indigenous fuel, coal, than in imports of this kind.
I have no intention of pursuing this matter, but I ask that the right hon. Gentleman should keep us closely informed on these developments. If he can give more information on the points I have raised I should be grateful to him.

Mr. Ede: I have the honour of representing more than 75,000 electors in this House. Among them is my hon. Friend the Member for Houghton-le-Spring (Mr. Blyton). I want to support the point of view he has put forward this evening.
From time to time we see passing this House colliers going to the Wandsworth Gas Works for the South Eastern Gas Board. The day before they pass here they start in my constituency. They bring coal from mines there, among them the one in which my hon. Friend served his time in the coal industry. At one time that colliery company and Wandsworth Gas Council, which has been absorbed into the South Eastern Gas Board, were closely interlocked both in their directors and in the people who held the capital of the two concerns. Therefore, it is a matter of the utmost concern to my constituents and other coal mining constituents in the Durham coalfield as to what happens on the issue which has been raised by my hon. Friend.
I am bound to say that the more the Minister of Power sought to reassure us the more alarmed I became. Because this methane would greatly popularise the use of gas, it was thought that that would lead to a greater consumption of gas coal. That seems a rather peculiar deduction to draw from the high testimonies which the right hon. Gentleman paid to the qualities of methane as a

gas producer. My hon. Friend the Member for Newton (Mr. Lee), in supporting my hon. Friend the Member for Houghton-le-Spring, said that he did not intend to pursue the matter very far tonight, but it would be wrong for me to leave the Minister under any delusion that this is a matter which is not giving the very gravest concern throughout the whole of the County of Durham. I can speak of that from my personal experience and the experience of other mining areas which in the past have supplied fuel to the various gas undertakings of the country.
It is no easy thing to meet miners after their experiences in the years between the two wars, still with a haunting feeling of fear when they see anything that tends still further to deteriorate the prospect of employment in their industry. I am sure the Minister will agree that it is one thing for him to make the speech he made here tonight where we are far from a coalfield and another to repeat that statement in an area where men know that their livelihood depends on what is to happen. I ask him to realise that there is a very deep anxiety which broods over the areas where coal has been mined for a very long time for the production of gas. Sometimes they are unable to take the kind of philosophic view which the right hon. Gentleman asked us to take this evening.
They are not Luddites; they are people who have given their lives to this great industry, which was at the basis of our nineteenth century prosperity. Men now in the industry have seen their position as the primary producers of the wealth of this country being steadily whittled away by the competition of other fuels and other ways of producing power. They have served this country well in the past in circumstances of daily danger, as we all know, and they are entitled to be considered by the Minister and his colleagues in any decisions which have to be made.

Mr. Wood: I hope that I did not give the impression when I spoke earlier that I did not in every way share the kind of concern of which the right hon. Member for South Shields (Mr. Ede) has reminded us. I think I said that I appreciated the apprehensions which must be felt—particularly with memories


of less pleasant times—when any suggestion of this kind is made or is considered a possibility.
In reply to the right hon. Gentleman, I should like to remind the Committee, looking at it, perhaps, in the opposite way from the way I first looked at it, that both my hon. Friend the Parliamentary Secretary and I, on Second Reading, I think, spoke about the immense fight which faced the gas industry. I think that that statement of ours won a certain amount of approval in the House and hon. Members generally agreed. The industry is up against it. It has a fight on its hands, and I hope sincerely that it will fight successfully. I am quite certain that my own approach should be to give the gas industry every chance— I hope that, here again, I shall carry hon. Members with me—to compete successfully with other fuels and to win the fight. If the gas industry could show me that liquid methane was likely to be of very great benefit to the industry, I do not believe that it would be either right or wise of me to refuse it.
Indeed, if I asked the gas industry to go into the fight with at least one of its hands tied behind its back because I would not agree to something which it thought likely to be beneficial, then I should be guilty not only of being unfair and unwisely treating the gas industry, but I should be rightly blamed by those, like the right hon. Gentleman, who are interested in the coal industry, because, if the gas industry does not succeed and does not win the fight, the coal industry will be about the greatest sufferer. That is why I am quite sure that I ought to look into these proposals, if or when they are made, with an open mind, having very much in view the sort of considerations which we have discussed this evening.
The hon. Member for Newton (Mr. Lee) asked me several questions about the possibility of building other ships, and so forth. In the absence of any proposals—none has yet been put to me by the gas industry—I am unable to answer any of his questions except the one he asked about the "Methane Pioneer", which referred to the past. The "Methane Pioneer" has made seven experimental voyages. I understand that it is not to make any more experimental

voyages. The gas industry is assessing the results of those trial cargoes before making any proposals, if, indeed, it does have any to make to me. That is the only answer I can give the hon. Gentleman.
On Second Reading, I promised that, when proposals were made, I should certainly take an opportunity to report them to the House so that the House would be able, by Question and Answer or in other ways, to express a view upon them. I repeat that undertaking tonight.

7.45 p.m.

Mr. T. H. H. Skeet: I rise to make only a short speech because I heard the hon. Member for Newton (Mr. Lee) remark that it would be extremely unwise to base the fuel and power policy of the United Kingdom on the supply of natural gas because, he said, the supply of such gas may be exhausted in a very short time. Of course, we hear this argument weekly, monthly and even yearly, and, in my view, its validity must be assessed in two ways—from an assessment of the proved reserves which are available, and the possible reserves in the world.
It is right to remind ourselves that, so far as oil is concerned, Kuwait was not an oil producer until 1945, yet the reserves of oil located there are roughly equivalent to those in all North America, Central America and South America. Natural gas is a valuable product in the United States of America, in Canada, in Venezuela, where it is flared, in the Middle East, in Hassi R'mel, Algeria, in Libya, and at Lacq, South-West France. There is no question about the available supplies drying up in the years to come. It is inexhaustible in supply.
The other point made is that we should make the greatest use of the resources we have available from home and abroad. My right hon. Friend put the point succinctly and quite advisedly, in the best possible way. First of all, he has to decide upon the feasibility of the experiment and then to decide whether the experiment would lead to a reduction in costs. Against that background, we must remember that it is the duty of the Gas Council to supply the community with fuel at the cheapest possible price and give the best service to the customer. If it is to work towards that end, the


use of natural gas may lead to a valuable source of fuel.
Another factor which should be underlined is that methane, not containing carbon monoxide, is non-toxic; in other words, it can kill only by asphyxiation. Also, being lighter than manufactured gas, it tends to rise very rapidly and is, therefore, less likely to lead to explosion than manufactured gas. Moreover, the calorific value is very much higher than that of manufactured gas which we have in the United Kingdom.
I hope that, in the years ahead, if a proposition is forthcoming, the Gas Council will consider a vessel of 10,000 tons, or perhaps 20,000 tons, which would make it an economic proposition. This should be carefully examined. We must consider all our fuel supplies comprehensively and, on this basis, the gas industry has a close interest. The gas industry is run by one of our national corporations which must pay for itself; it exists on a competitive basis and, for that reason, we should endorse any sound policy which it advocates.
I appreciate very well the apprehension felt by the National Coal Board but, in this context, let us look back a few years to 1896 when the Flag Acts were repealed. There was much controversy then because, so it was said, the motor car on the road was a menace to the horse and carriage, and a man with a red flag was obliged to walk in front of it so that the car should not exceed four miles an hour. People said that the motor car was a menace and it ought to be put off the road—

The Temporary Chairman (Dr. Horace King): Order. We are not discussing the motor car industry. I hope that the hon. Gentleman will relate his remarks to the Amendment before the Committee.

Mr. Skeet: I was referring to the motor car, Dr. King, to show that we have to be in keeping with the times. If we find a source of fuel which can be advantageous to us not merely in the 'sixties but perhaps in the 'seventies, we should look at it from that angle. There is, naturally, apprehension in the coal industry, but, on the other hand, we must look to the future to find anything which may work to our national advantage. That was the reason I in-

troduced the subject of the motor car and the Flag Acts. It was simply to illustrate how legislation can impede innovation.
I think I have made my argument sufficiently clear and I need not on this occasion reiterate what I indicated on a former occasion when I said that we should give the Gas Council an opportunity of trying this experiment because it may be much to the advantage of the whole community.

Mr. Ness Edwards: Speeches of the kind we have just heard from the hon. Member for Willesden, East (Mr. Skeet) cause a great deal of apprehension. The hon. Gentleman, apparently, is concerned only about economics and costs and he is not at all concerned about social consequences. There is no advantage to this nation in saving 10s. a ton on coal and paying £3 or £4 a week to an unemployed collier. We must strike the proper balance in these things.
I wish to reinforce the views expressed by my hon. and right hon. Friends. South Wales is as much concerned as Durham about this matter, as I am sure the Committee will appreciate. We heard this story a long time ago. It applied to coke ovengas in the first place. We saw coal not being taken to the small gas works. The gas works were being shut down. At the same time, we saw the waste gas which used to be burnt in flares above the coke ovens being piped into the gas system. That could be justified, although it had very serious consequences. It was a product of the coal. It did not have the social consequences of the introduction of liquid methane gas from Canada, or wherever it may be.
What has not been taken into account is that this is a matter of obtaining material from hard currency areas.

Mr. Skeet: Would the right hon. Gentleman say that the Middle East and the French zone are hard currency areas?

Mr. Ness Edwards: I am speaking of the operations of "Pioneer" which is fetching gas from the hard currency areas. If we are to believe a member of the Gas Council who came to South Wales a fortnight ago, he said that "Pioneer" had made seven trips and


the Gas Council was engaged upon evolving permanent plans with no indication of the economic side. If we are to import methane gas on a large scale, what are we to do with coke oven gas?
All these matters should be balanced. I do not object to the Gas Council carrying out experiments to ascertain what is right on balance, not purely in the interests of the Gas Council but in the interests of the national economy. Certain things may be very much in the interest of the Gas Council but they may damage the national economy in general. If this is to be the method, we must ensure that the social consequences of its introduction are adequately considered. We do not want to keep men in the pits. We want to give them a chance to live. It is unwise and uneconomic to introduce a system of this sort and save a bit on gas but impose something upon ourselves at great social cost because we are not prepared to consider the consequences.
I ask the Minister to ensure, when he makes his report to the House, that the Gas Council, in putting forward its plan, will let us know the economics of the matter. We want to know how much will be involved. We want to know the cost of gas provided by the coke ovens. The Llanwern plant is coming into operation in South Wales. This, I am told, will produce so much gas that it will knock out many of the generating plants in the Midlands. It is no use bringing in methane gas if the gas from the coke ovens is to become surplus to our needs.
I hope that these considerations will be kept in mind. I ask the right hon. Gentleman to remember that no new method should be introduced until we are in a position to deal with the social consequences. It will be of no benefit to this nation to have derelict valleys in Durham or South Wales in order to save a "bob" or two, or part of a penny on a therm of gas.

Mr. Blyton: As we have a chance to return to this matter, and although the Minister's reply was not reassuring to me, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Lee: I beg to move, in page 1, line 15, at the end to insert:
Provided that no order shall be made by virtue of this subsection unless the Minister is satisfied that adequate financial provision has been and will continue to be made for a comprehensive programme of research into the technical and commercial possibilities of the total gasification of low-grade coals.
As I said on Second Reading, I have the greatest admiration for the way in which the Gas Council is tackling a very difficult problem and the imaginative way in which it is setting about the job of carrying out more and more research. This Amendment is not to be taken as a criticism of the efforts which we are happy the Council has made. We require more information on the important subject of the total gasification of low-grade coal.
We know from the 1959 Report and from the pamphlet which the Council produced that some work is being done on the Lurgi plant. We know that the Council is hopeful of being able to burn much more low-grade coal than has been possible in past years. While we agree that the Lurgi plant is probably the best thing that we have had so far, we are also conscious of the fact that the Council has not, as yet, told us that it intends to expand beyond those plants in Scotland and the West Midlands. Great stocks of coal are piling up, many of them of the low-grade type. Whether or not we agree with the hon. Member for Kidderminster (Mr. Nabarro) about the rate of deterioration of these stocks, it is, nevertheless, obviously right to find a vehicle which will enable us to utilise as much low-grade coal as possible at the earliest possible moment.
We hope that the Minister will say something about the extension of the two existing plants. This matter is tied up with much of what the Gas Council stated in its Report about the need for a national gas grid. These things are allied, and, while we wish the Council well with regard to what it has done up to now, we should like to know about its plans for the future to give a bigger supply of gas from the total gasification of coal.
These are the reason for the Amendment. We hope that the Parliamentary Secretary will be able to tell us that, while the Council has carried out these two projects, it looks upon them merely


as a pioneering and experimental effort which will be speedily followed by an extension of this development in the industry. I imagine that all sides of the Committee would welcome such an extension.

Mr. Gerald Nabarro: The Amendment refers to
the technical and commercial possibilities of the total gasification of low-grade coals".
The hon. Member for Newton (Mr. Lee) has applied himself only to total gasification in plants of the Lurgi type. He made no mention of the total gasification of coal underground, which is a matter of equal importance.
Between 1946 and 1951, the Chief Scientist's division of the then Ministry of Fuel and Power spent very large sums of money at a place called Newman Spinney, near Chesterfield, in firing underground thin and generally sulphurous; or gassy seams of coal which it would be uneconomic to mine as coal and bring to the surface in an endeavour to sell commercially due to the poor grade of the material and the high ash content. Experiments were then conducted in my constituency, at Bayton in Worcestershire, in an extensive area west of the River Severn, where a fault had left a large number of thin and sulphurous seams of low-grade coal lying close to the surface and in many instances totally exposed. On one occasion the then Minister of Fuel and Power, my right hon. Friend the Member for Sutton Coldfield (Mr. G. Lloyd), and I myself visited the experimental plant at Bayton, and it was actually running and producing gas on a modest scale between 1951 and 1954 when mysteriously it was totally closed down.
8.0 p.m.
My purpose in intervening in the debate on the Opposition's Amendment tonight is to ask my hon. Friend the Parliamentary Secretary to say what has become of all these experiments. We spent very large sums of money. I know not whether the money was spent by the Ministry or by the National Coal Board or by the Gas Council or by the gas boards or an amalgam of all of them. But the plain fact remains that in many parts of the world, notably the U.S.S.R., they deal with their low-grade coals, which it is not an economic proposition to mine and sell commercially as coals,

by underground gasification and by feeding the resultant coal gases into a gas grid or main which is a very easy and convenient method of total gasification, but below ground and not above as in the Lurgi plants.

Mr. Lee: The hon. Member is referring to a very important matter. I remember when we had great hopes of that here. I wonder what his information is on this? Mine is that economically it was quite a failure here. I think in the Soviet they have much wider seams.

Mr. Nabarro: I have read all the extensive technical reports on this matter and in certain parts of the country it was not deemed to be an economic venture. The plain fact remains that we have invested very large sums of money on a national gas grid and bringing to the surface and mining by conventional methods substantial tonnages of low-grade coal with a high ash content which is then carbonised at gas works or burned at power stations. This was the object of the experiments on low-grade and thin coal seams in my own constituency and in the Nottinghamshire coal field. There is an opportunity here for the National Coal Board in proper co-operation with the local gas boards. The resultant product is coal gas, of very high quality —I am told, much higher quality than is produced from a Lurgi plant—when fed into the gas mains.
I would ask my hon. Friend whether in his reply he will tell me, first, what was the total capital expenditure at Newman Spinney near Chesterfield and Bayton in Worcestershire on these extensive experiments conducted over a period of seven or eight years on total gasification underground of low-grade coals. Secondly, I should like to know whether it is the policy of the North Coal Board or the gas boards or the Gas Council or an amalgam of all of them to continue underground gasification and on a commercial production scale. Thirdly I would ask, if the answer to the second question is negative, why not?

The Parliamentary Secretary to the Ministry of Power (Mr. J. C. George): The speech of the hon. Member for Newton (Mr. Lee) on this Amendment reflected the great anxiety felt about the future of the coal mining industry especially among those who live in the


mining areas. I fully understand the desire to be assured that everything possible will be done to press on to make the best and widest use of our main indigenous raw material. Here at least is one subject on which there can be no difference of opinion. I willingly accept the responsibility for the Government and the nationalised industries concerned to press on with all zeal to that end. I think we all—the Government, the nationalised industries and the Opposition—speak with a united voice. One need only look at the publication of the Gas Council, "Gas Looks Ahead" to see how the Council looks at this very important matter. In paragraph 20 it says:
The main object of the Council's research in the field of gas production is the development of new processes which can make use of poorer quality coals and of alternative fuels as raw materials. The total gasification of oil and coal at near atmospheric pressure and at high pressures is being studied, and pilot stage work is now in progress.
The Council adds towards the end of the paragraph:
… it is expected that in due course total gasification will be the major method of gas manufacture…
During the Second Reading debate my right hon. Friend made his position quite clear on this important matter of research into the total gasification of coal when he said:
These needs for new developments in the industry underline very clearly the importance of the research that is being carried out. A fairly wide range of research is being carried out at present. There is study in many directions of high-pressure reactions of both coal and oil with steam, oxygen and hydrogen. I have already mentioned the Lurgi process. Again, there is the possibility of hydrogenating coal to produce a complete town gas."— [OFFICIAL REPORT, 8th March. 1960; Vol. 619. c. 254–5.]
The Gas Council repeats these assurances in its Annual Report for 1958–59. In paragraph 27, referring to the experimental work which is being done at Partington it says:
The ultimate objective of the experiment, however"—
which is a very big experiment indeed—
is a process for the hydrogenation of coal …
Everything indicates that all concerned, all who are affected by the future, all who can devise research, are very much

seized of the need to press on as fast as possible in finding ways and means of using the cheaper, lower grade coals by the method of total gasification and, as the hon. Member for Newton said, there is every evidence of the sincerity and eagerness of the Gas Council.
Already we have two Lurgi plants being built. He suggests that I should tell him something about the future with regard to extending the use of the Lurgi plants. I would say that I, as an individual, felt that to go on from the Lurgi plant at Westfield and the second at Coleshill before we had any real experience of operating these expensive units in this country would be taking a bit of a risk and that it would be unwise to rush and build up these plants in many places till we had some experience. The fact is that we shall soon have some experience because the Westfield plant is expected to come into operation in the autumn. I am glad to tell the hon. Gentleman that everything is up to schedule there, and we shall soon begin to get experience and gain confidence.
I can assure him that the gas boards in other areas are studying the possibilities of extending the use of Lurgi plants, but it has to be remembered that the Lurgi is a plant which cannot be built just anywhere. It must be built where there is a large, adequate supply of cheap coal. Therefore, we cannot paint a picture of the plants spreading all over Britain, but the evidence is there that everyone concerned is seized of the importance of extending research into the use of low-grade coal by gasification.
My right hon. Friend's predecessor was anxious about the subject a long time ago and appointed the Wilson Committee. We are eagerly awaiting the Wilson Committee's report on all aspects of the further uses of coal, and we hope that it will give attention to the hydrogenation process as well as other means of extending the use of coal. We eagerly await this report, and hope that the Committee will pronounce on the usefulness and advisability of extending the research at present being practised.
It must not be felt that because there is a desire for a greater amount of research into the gasification of coal there is not a lot being done already. A great deal is being done. The Lurgi plant in a way is research itself. A great


deal of money is being spent on research into a slagging gasifier to improve the Lurgi process and get it to work at higher temperatures and give a higher quality gas. The keenness of all concerned is evident. The Amendment would add nothing to that keenness. When one considers the capital programme for research which my right hon. Friend must approve and one notes the numerous items which come under that heading, on which my right hon. Friend has to decide with the advice of his Scientific Advisory Council under the chairmanship of Sir Alexander Fleck, I think that it would be inappropriate to single out this one item for attention and write that fact into the Bill.
I appreciate the keenness to see research being extended, but I do not think that writing this into the Bill would make anyone keener than they are today. Between now and the making of an Order there will be an opportunity for the House to see whether this keenness is being kept up and research is being carried out, but the whole subject is being covered by the Wilson Committee, and it may wish to point out what other roads we can follow to achieve the end of using low-grade coal. Between now and the coming into force of an Order made by my right hon. Friend there will be time to judge the Minister, the Gas Council and the boards on the question raised in the Amendment.
As to underground gasification at Newman Spinney and elsewhere, serious attempts were made to find whether it was an economic process. A fair amount of money was spent. I cannot at the moment give my hon. Friend the Meanber for Kidderminster (Mr. Nabarro) the total sum, but I will write to him and give him the actual expenditure. The final decision to cease operations was made on the ground that the project was uneconomic and that no good purpose would be served by continuing the investigation.

Mr. Nabarro: Who made the decision that it was uneconomic? My hon. Friend was not at the Ministry at the time but he will recall that the experiments were conducted by the Chief Scientist's division at his Ministry. Who decided not to continue with underground gasification? Was it the Ministry of Fuel and Power, the National Coal Board, or the Gas Council?

Mr. George: My hon. Friend will recollect that after the initial experiments were carried out, the process of underground gasification was turned over to the National Coal Board, in association with private interests, and at the end of the day the decision not to proceed with the experiment was made by the National Coal Board.

Mr. Lee: I have no wish to press for any further explanation and I therefore beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed. That the Clause stand part of the Bill.

8.15 p.m.

Mr. Lee: Before we part with the Clause, I should like to raise one further point. In the course of our discussions we have agreed on both sides of the Committee that we are looking at what we hope will be a comparatively new gas industry. We hope that before long the gas industry will be using more modern methods than have been possible hitherto. We know from reports we have had of the very great successes which have been achieved by each of the twelve area boards in establishing a more rational system within their own boundaries and a system of new piping which has made for a safer industry and an industry in each of these areas which gives the public a far better quality service than was possible before.
Now we are entering a phase in which we are all looking at the possibility of a national grid rather than a regional organisation. Has not the time come when we should look again at the organisation of the industry? I take second place to none in my admiration of what the twelve boards and the Gas Council have done. They have done an extremely fine job, but if we are to reach a point when gas will be produced from coal at greater distances than ever from the areas where it will be burned and an era when we shall see the development of a national grid, in the sense that we have it in the electricity industry, it may well be that the time will come shortly when we had better look at the structure of the gas industry.
At present we have the Gas Council and twelve practically autonomous boards looking after the regions. Now


we may be able to look at the industry from a much more national point of view and it may well be, because of the changes which we know are coming, that it would be better for us to consider whether the existing type of organisation gives us the best returns in national terms.
The Times newspaper published a leading article on this very subject on 21st March. Some of us had been discussing this matter for weeks without actually deciding whether or not we should raise it in the House, but The Times said:
When the Act was passed the present technical circumstances were not envisaged. At first sight they would seem to point to the usefulness of creating a body for gas analogous to the Central Electricity Generating Board. The case for this is strong. But whatever administrative changes are made it is desirable that they should provide adequately for co-ordination not only within the gas industry but also, where it is appropriate, between all the nationalised fuel producers.
I think that is a very wise suggestion. It may well be that the time has come when with advantage we could look at the structure of the electricity industry—

The Temporary Chairman: I do not like to interrupt the hon. Gentleman, but the debate is going a little wide of the Clause, especially if the hon. Gentleman intends to talk about the electricity industry.

Mr. Lee: I am using that, Dr. King, as an illustration of something which I wanted to point out about the future of the gas industry and of what we may well desire to see in the industry if we are to have national results as distinct from the great successes which we have had regionally up to now. I have taken the opportunity on the Motion, "That the Clause stand part of the Bill", to suggest to the Minister that the Gas Council may well care to look at this matter. I do not know whether we can ask for a report on it, but I should like to know the reactions of the Gas Council and of the Minister to a type of development which, at first glance, I should have thought would have been appropriate in the new period into which we are now moving.

Mr. George: I am sure that the area boards would be heartened by the com-

plimentary things which the hon. Member for Newton (Mr. Lee) has had to say about the new gas industry, for, indeed, a new gas industry has been created since a very high proportion of present output comes from modem plant. I agree with the hon. Member that it is a safer industry, and every day the Gas Council is seeking ways and means of making it safer for the future. It is an industry with a great tradition, which undoubtedly has been helped in recent years to transform itself so as to face the future with confidence, while appreciating the battle which lies ahead.
The hon. Gentleman then looked into the rather distant future. When one talks about the national grid and about mighty gas-making units built in our coalfields, one is not talking of tomorrow but of a fairly long time ahead. Of course, it is right that we should talk about it, because it may be that in present-day developments the foundation of a national grid could be laid and eventually come to fruition at the time when we can achieve mighty units situated in the coalfields.
I would think that the pattern drawn up when the industry was nationalised has shown itself to be a sound one, and it is worthy of note that very soon gas will cross the boundaries of the areas for the first time. The problem will make itself felt increasingly and, when the national grid and mighty plants are there, someone will have to consider whether this is still the best way. As the hon. Gentleman said, it is interesting and gives us food for thought, although the time for it is not now. The main thing which has emerged from his speech is his confidence in the industry and his appreciation of what it has done. I am sure that all he has said will be appreciated at the headquarters of the different area boards.

Mr. S. O. Davies (Merthyr Tydvil): Reference has been made to gasification and hydrogenation. I shall not make a long speech, although my interest, and that of some of my hon. Friends who are still in this House, has been longstanding. Has the Minister made any inquiries about the substantial sum of public money given to a certain big firm in this country to carry on research into the possible hydrogenation of coal?


That happened as far back as twenty-five years ago, and we have never had a report on it.
Further, the Minister appears to be rather pessimistic about the possibility of gasifying coal in its natural condition underground. Has he made any inquiries as to the success of experiments in large-scale gasification that have been carried on for some years in Russia, in what are known as the Gorlovka coal mines in the Donbas Coal Basin?

The Temporary Chairman: I hope that the hon. Member will deal with this point briefly. We have been discussing gasification on a previous Amendment, when he could have spoken at length on that subject.

Mr. Davies: I do not intend making a long speech, Dr. King, I can assure you. However, we are on the Question, "That the Clause stand part of the Bill", and if the discussion of hydrogenisation and gasification was in order on an Amendment to this Clause, I foil to see why it cannot be in order when we are discussing the entire Clause and all its implications. At any rate, I do not wish to take up the time of the Committee in arguing that point.
I suggest to the hon. Gentleman in all sincerity that he should make inquiries into the two matters I have mentioned because, sooner or later, the possibility of both—and, in particular, hydrogenation—will be raised again and again on the Floor of this House when we deal with coal, either directly or indirectly. That is all I wish to say at the moment.

Mr. George: Since the hon. Member for Merthyr Tydvil (Mr. S. O. Davies) spoke about the hydrogenation of coal being of continuing interest on the Floor of the House, I hasten to reassure him that hydrogenation is an ever-present concern in the minds of the members of the Gas Council. The Wilson Committee is at present studying its possibilities, and we hope that it will say whether the present research is along the right lines, or, if not, along which lines it should be pursued. Hydrogenation is undoubtedly a live issue in the Gas Council, as I have said already.
With regard to the substantial sums granted twenty-five years ago, I have not the benefit of any information—

Mr. Davies: What happened to them?

Mr. George: I will investigate and will communicate with the hon. Gentleman. The underground gasification of coal in Russia is rather a long journey to take tonight, but I have some knowledge of what is taking place there, and I will send the hon. Gentleman a note on this subject as well.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Clauses 2 and 3 ordered to stand part of the Bill.

Bill reported, without Amendment.

Motion made and Question proposed, That the Bill be now read the Third time.

8.26 p.m.

Mr. Nabarro: Before we start with the Bill, I want to make one or two comments on investment by the gas boards and by the Gas Council. It will be recalled that during the Consolidated Fund Bill debate on 16th March my hon. and gallant Friend the Member for Knutsford (Lieut.-Colonel Bromley-Davenport) raised a matter concerning investment in am advanced meter readers' college at Mere in Cheshire, a capital investment being carried out by one of the gas boards. He was promptly ruled out of order by Mr. Deputy-Speaker.
I do not dwell upon that point because it is not appropriate for debate on the Third Reading of this Bill, but it caused me to make researches and I discovered that whereas this Bill raises the total of borrowing powers, as will be seen in the Explanatory Memorandum, from £450 million to £500 million for the entire nationalised gas industry, and in certain circumstances enables my right hon. Friend to go as far as £525 million, the annual amounts for investment in the gas boards fall within the appropriate sections of the annual Finance Act.
The interesting feature is that it is not within the rules of order to debate on the Finance Bill individual capital projects in the gas industry. Thus again, as I said on the Iron and Steel Bill, once this Bill leaves the House today, covering investment by the gas industry for between four and five years ahead, no Member of the House of Commons can challenge any item of capital investment by any one of the gas boards, save only


in retrospection—a matter of from eighteen months to two years after the investment has been carried out.
That is a very unsatisfactory state of affairs. This Bill stretches forward for investment purposes for four or five years ahead. I hope, on the Finance Bill, to find ways and means of moving Amendments to capital investment in these industries in order to enable the House of Commons to give prior sanction to capital investment in the instance of the gas boards within the global borrowing powers under this Bill. That is how these matters are related, but it is strictly in order now. not only to ask my right hon. Friend the Minister of Power to respond to this inquiry by my hon. and gallant Friend the Member for Knutsford, as to what is the purpose and what is the cost of this advanced meter readers' college at Mere in Cheshire, and notably the final part of my hon. and gallant Friend's speech, which I have since checked. My hon. and gallant Friend said:
For eighteen months or so I have tried to obtain this information from the Minister. In correspondence, I asked him point-blank how the public can ever find out how much this building cost, and what the other expenses are. The reply I received this morning is that the public 'have no statutory or prescriptive right to the information.' "—{OFFICIAL REPORT, 16th March, 1960; Vol. 619, c. 1350.]
I see that my right hon. Friend is nodding his head in agreement with that statement, and I believe that he wrote the letter to my hon. and gallant Friend saying that the general public—
have no statutory or prescriptive right
to challenge any item of capital expenditure by a nationalised board. Nor, evidently, has a Member of Parliament. For the reasons which I explained in my speech earlier this evening and on former protests of this kind, once a borrowing powers Bill is through the House—this Bill covers five years ahead—no Member of the House of Commons can challenge, by Parliamentary Questions, on the Consolidated Fund Bill or the Finance Bill, any of the items of investment, the wisdom of it, the economy of it, whether public funds are being wasted or not, and, I repeat to my hon. Friend the Parliamentary Secretary, whether the taxpayers' money is being wasted. I take the view that it is taxpayers' money; he does not, but I do.
This is a highly unsatisfactory state of affairs. Of course, the gas industry has to have this extra capital. I do not object to the borrowing powers in this Bill, but I strongly object to the fact that only once in every four or five years can I criticise what is deemed by other persons to be wasteful expenditure by the board; but I propose to find ways and means of doing it on the Budget this year by separate votes.

Mr. Deputy-Speaker (Major Sir W. Ansiruther-Gray): I hope that the hon. Member will not go too far in forecasting what he proposes to do on the Budget. I think that we must confine ourselves to the Third Reading of this Bill.

Mr. Nabarro: As always, I am deeply grateful for your guidance and support, Mr. Deputy-Speaker, in this difficult position in which I find myself. Of course, you are underlining the difficulties which I am trying to put to the House this evening—the near-impossibility of a Member of Parliament doing his job in the context of allegations of wastefulness by these boards. Does the hon. Gentleman wish to interrupt?

Mr. W. R. Williams: I certainly do not want to interrupt the hon. Gentleman. I think he is well enough out of order without me helping him.

Mr. Nabarro: I am sorry that the hon. Gentleman wishes to usurp your duties, Mr. Deputy-Speaker. However, let us stop the squabble and get on with the Bill.
The point I want to make about the sort of allegation which appeared in a Sunday newspaper yesterday week about the gas board—and it involved its finances—is that this is evidently my one opportunity in four years to challenge that sort of thing. Not that the Parliamentary Secretary will give me any answer, of course. He will refer me to the Chairman of the Gas Council. The Chairman of the Gas Council will refer me to the chairman of the gas board, and then I shall not get any satisfaction. But I will record this complaint in the OFFICIAL REPORT, because that is the kind of thing which Members of Parliament ought to be able to challenge and vote about.
I hope my hon. Friend does not reply saying that I can raise this matter on


the Motion for the Adjournment, because I know what sort of a stuffy answer I shall get late at night in an Adjournment debate. I quote from the Sunday newspaper:
The Gas Board in the port of Southampton takes it duties seriously. So seriously in fact that it sent eighteen men to make sure that the housewife who ordered a cooker, water heater and boiler got exactly what she wanted…. First, an inspector palled to see if the main was large enough. Then, a salesman arrived to sell the cooker which had already been bought. Then, a second salesman arrived to sell the stove that was already on order. A van driver arrived with a new meter. A fitter called to fix it. Then two labourers arrived to fix a new main. A lorry driver and his mate delivered the new stove. An inspector called to look at it. A van driver collected the old meter. Another van driver delivered the new heater. Next came a fitter to check the water temperature. Another fitter arrived to check the stove. And a lorry driver and his mate arrived to take away the old one. An inspector turned up to check the water heater which had been damaged in transit. Finally, another inspector called to check and pass all the new installations.
This was a total of 18 men to carry out a simple installation which, pre-nationalisation, would have been done in a matter of hours by one fitter and his mate.
The cost of this sort of thing is falling on the local gas board. If that cost were not incurred the Council would be finding a commensurately larger sum from its own resources to finance capital investment and would not be coming to the House for an equivalent sum. This is the sort of complaint which Members of Parliament constantly receive in respect of the nationalised boards. Some of them are justified, some of them are not. This complaint was in a Sunday newspaper called The People on 20th March. For all I know, it may not be a valid complaint.

Mr. Deputy Speaker: My difficulty is to know whether this complaint can be remedied by anything in the Bill. We can discuss only what is in the Bill.

Mr. Nabarro: I realise that and I am skating, as always, on very thin ice, but, as Mr. Speaker wrote to me the other day, no doubt my ingenious mind will find ways and means of raising these matters. It is related to the Bill because had this money not been spent, then the sum required under the Bill would not have been as large as it is.

Mr. Lee: Surely the hon. Member should have moved that we purchase a copy of The People.

Mr. Nabarro: I will leave the Southampton case. My point is that, other than on the borrowing powers Bills once every four or five years, we have no means whatever of securing any redress in respect of complaints such as that. I do not take the Parliamentary Secretary's view that it is none of the business of a Member of Parliament, or that it is not the taxpayers' money which is involved. I take the view that we are voting too much money in this borrowing powers Bill for too many years ahead, and I shall seek to remedy that in a few weeks' time by endeavouring to regulate the sum on an annual basis so that the money is spent in such a way that we do not deal with it in retrospection two years later when we debate these industries on the report and accounts of the board concerned.
Of course the gas boards must have this extra capital, for the most part. It is for that reason that I support the Motion, "That the Bill be read the Third time." But I do so warning my right hon. Friend once again that he will get no more money out of me. I am fed up with his predatory habits in regard to the National Exchequer. I am fed up with his extravagance.

Mr. G. R. Mitchison: On a point of order. Would a discussion on the invention of gas be in order, for if there had been no gas there would be no Bill?

Mr. Deputy-Speaker: I think we should not discuss a hypothetical case. So far, no hon. Member has endeavoured to discuss the invention of gas.

Mr. Nabarro: I will return to what I was saying when I was so frivolously interrupted by the hon. and learned Member for Kettering (Mr. Mitchison), who has not been in his place during the debate on the Bill and whose absence, of course, we have deplored. I am sorry that I cannot provoke him to a further intervention. I was saying to my right hon. Friend, when I was so frivolously interrupted, that I am fed up with his predatory habits in regard to the national Exchequer, I am fed up with his extravagance, and I do not like him


sitting there in the position of the biggest spender in the Government. Nobody is nodding dissent. He is the biggest spender. He authorises more money for these nationalised boards than all the remainder of the Ministries put together. I shall be much sterner about this on future occasions and endeavour to keep him in much better order than that in which I have succeeded in keeping him during the last few weeks.

8.40 p.m.

Mr. George: I am sure my right hon. Friend the Minister of Power is suitably terrorised by the peroration of my hon. Friend the Member for Kidderminster (Mr. Nabarro) and looks forward with dread to the years that lie ahead. I and the House have been entertained by the tale of what my hon. Friend will do to the Finance Bill when it reaches the House, but that is not really our concern this evening. We are dealing with the Gas Bill and its borrowing powers. Underneath that umbrella my hon. Friend asked about Mere College which is the responsibility of the North-Western Gas Board.
This is an example of the cases which have been raised throughout the years through the desire of individuals or of Members of Parliament to discuss single items of capital expenditure by nationalised boards. There are thousands of individual items of capital expenditure every year, and it would be quite impossible and intolerable if every one of them were open to examination by any individual demanding particulars about it. That is what would follow from giving way on this occasion. The matter has been discussed for a long time now. This item is just one of many, and it would be intolerable if access were given to individuals or members to items of this nature.

Mr. Nabarro: Is the hon. Gentleman refusing this?

Mr. George: This has been refused for a long time.

Mr. Nabarro: Will the hon. Gentle-give way?

Mr. George: Not again. I have dealt with the general argument that it would be intolerable if individuals or Members of Parliament were to obtain access to

each individual item of capital expenditure by the nationalised boards.

Mr. Nabarro: Why not? We have paid for it.

Mr. George: We have heard complaints about the inability of this House to discuss examples of alleged waste by the boards. My hon. Friend mentioned that at Southampton he picked out another one and put it on record. I took an interest in that rather sensational report. As is usual with such reports when cut down to size it has not the same appearance at all. He mentioned that two salesmen called to sell a cooker already bought. He did not reveal that they were not from the Gas Board.

Mr. Nabarro: Who were they employed by?

Mr. George: I said they were not employed by the Gas Board.

Mr. Nabarro: Who were they employed by?

Mr. George: He also spoke about the cooker and the water heater being bought and all the people coming to put them in. The cooker was bought from one source and the heater from another, and the respective people came to do their respective jobs. It was not the Gas Board at all. It does not serve a good purpose to pick up sensational newspapers, accept all that is in them, and bring them to the House without checking, as my hon. Friend has done. It is a serious thing to bring them to the Floor of the House no matter how attractive or colourful their stories may be.
My hon. Friend spoke of too much money being spent too many years ahead, and accused my right hon. Friend of extravagance. I am sure my hon. Friend has some experience of industry —whether small or vast, I do not know— and if he has experience of vast industries he will know that in order to be able to plan ahead and execute their plans they must have the knowledge that the finance is forthcoming. They cannot be subjected to continual investigations about those plans. They must have ahead of them a reasonable period of freedom from interference. That has been the view, rightly, of this House. It might not be the view of my hon. Friend, but in all humility I suggest that in this


case he is wrong and that it is right and proper that the boards of vast industries should have a reasonable time ahead to plan and execute their plans.

Mr. Nabarro: Before the hon. Gentleman sits down, does he not recall that when I referred to the extract from the Sunday newspaper I deliberately said that I was not in a position to say whether those allegations were valid but that they were allegations and ought to be replied to? Why does he deliberately twist those words? Let us have another answer?

Question put and agreed.

Bill accordingly read the Third time and passed.

Orders of the Day — LEGAL AID BILL

Order for consideration, as amended (in Standing Committee), read.

8.45 p.m.

Sir Lynn Ungoed-Thomas: I beg to move,
That the Bill be re-committed to a committee of the whole House in respect of the Amendment to Clause 1, page 2, line 12, standing on the Notice Paper in the name of Sir Lynn Ungoed-Thomas, and the new Clause (Ascertainment of maximum contribution), standing on the Notice Paper in the name of Mr. Mitchison.
leaving out of the original Motion:
and the Amendment to Clause 1, page 2, line 16.
Subject to that omission, I move the re-committal Motion.

The Attorney-General (Sir Reginald Manningham-Buller): On a point of order. I thought that the Amendment also left out the new Clause—Ascertainment of maximum contribution.

Mr. Deputy-Speaker (Major Sir William Anstruther-Gray): I did not understand it to leave out that. I understood the hon. and learned Member to include the new Clause.

Sir L. Ungoed-Thomas: It is as I said originally and the new Clause stands in.

Mr. William Ross: There is in my name on the Notice Paper an Amendment to the recommittal Motion, which is at the end to add:
and in respect of the Amendment to Clause 2. page 3, line 14, and the new Clause (Amendment of Third Schedule to Legal Aid Act in Scotland), standing on the Notice Paper in the name of Mr. William Ross.
Do you propose to call that, Sir.

Mr. Deputy-Speaker: That has not been selected.

Question put and agreed to.

Bill immediately considered in Committee.

[Major Sir WILLIAM ANSTRUTHER-GRAY in the Chair]

Clause 1.—(FINANCIAL CONDITIONS FOR LEGAL AID.)

Sir L. Ungoed-Thomas: I beg to move, in page 2, line 12, at the end to insert "one-third of".
The object of this Amendment is to do something to help the person with small savings.
The difficulty which we have felt and about which we have pressed in Committee is that while the Bill gives substantial relief to persons who are dependent on income, it does comparatively little for those who are dependent on small savings. It is a little puzzling to know why the Government have been so niggardly in dealing with that aspect of the Bill. One would have thought that they were particularly concerned about the person with a small amount of capital or savings, but the Government have done little to help that person.
This proposal is a modest one. All it proposes is that instead of the whole of what the earlier Act calls "disposable capital" being taken as a contribution towards legal aid, the amount that should be taken should be a proportion of that disposable capital, namely, one-third. It is the same proportion of disposable capital as the Bill proposes with regard to income.
The disposable capital involved here is not a substantial amount. As we know, the first £125 is not taken towards a contribution to legal aid. If there is disposable capital of over £500, generally speaking it is outside the legal aid scheme. We are concerned with the difference between £125 and £500, namely, £375, and what we propose is that, instead of the whole of that £375 being taken as a contribution towards legal aid, it should be limited to one-third of that amount. That is the maximum amount involved in the Amendment, the difference between £375 and one-third of £375.
In the Legal Aid Scheme, contributions are made according to means, whether of income or capital. There is no contribution below a certain limit, and above a certain limit a person falls outside the scheme. The general principle of the Bill, which we accept for the purpose of the Amendment, is that we go back to 1949 values. Unfortunately, the Government have refused to go back to the values at the time of the Rushcliffe Report, the 1946 values, although we have pressed them to do so. They have refused to do so despite the Rushcliffe

Report and the advice of their own Advisory Committee. However, even accepting the underlying principle of the Bill, it is unfair in its treatment of people with small savings.
Let us consider the way in which the Government treat capital compared with income. In accordance with the Government's principle of going back to 1949 values, this is what the Bill does with regard to income, and contributions from income. It raises from £156 to £250 the limit below which no contribution has to be made. It raises the limit above which income is excluded from the scheme. It raises the limit from £420 to £700 disposable income.
The Bill deals with capital differently. It raises the limit below which there is no contribution from capital from £75 to £125, but it does not raise, as it does in the case of income, the limit above which a person with a greater capital falls outside the scheme. Now, as in 1949, a person with a disposable capital of more than £500 falls outside the scheme. In Committee we pressed for the £500 to be raised to the corresponding 1949 value of £875 and we were defeated. This is the first way in which the Bill discriminates against the person with small savings. It discriminates against the person with small savings as contrasted with the person with income.
The only argument which has been put up against raising the £500 to £875 was that it would mean that lawyers practising under the scheme would get less fees than they would from those who were outside the scheme. That was an argument which was treated by both sides, I am glad to say, as one which did not merit serious consideration. The Solicitor-General, to do him justice, said it with considerable personal reservation.
In the course of his speech, however, the hon. and learned Gentleman indicated, so I understood, that he would be sympathetic to a Measure which would deal rather more justly with a person with small savings. He said in Committee:
If I thought for a moment that this"—
that was, our Amendment to raise the £500 to £875—
would result in a denial of justice, I should feel the force of the arguments used on me very much more strongly.


Later, the hon. and learned Gentleman said:
The point of these Amendments is not to ensure that a larger proportion of a man's capital is left to him."—[OFFICIAL REPORT, Standing Committee A. 10th March, 1960; c. 38.]
That seemed to indicate that if we proposed that a larger proportion of a man's capital were left to him, there would be susbtance and justice in the proposal that would merit the serious consideration of the Government. That is the very proposal which we now put forward.
I agree that a discrimination was made in the 1949 Act as between capital and income. That Act provides that
A person's contribution to the legal aid fund in respect of any proceedings may include—
(a) a contribution in respect of income not greater than half the amount (if any) by which his disposable income exceeds …
a certain amount, and
(b) a contribution in respect of capital not greater than the amount (if any) by which his disposable capital exceeds …
a certain amount. It takes a proportion of the income but the whole of the capital. What it says, however, is that the contribution to the legal aid fund may include
a contribution in respect of capital".
What has happened in the administration of the scheme is not simply to take a contribution in respect of capital over a certain amount, but to take the whole of the capital over that amount. It is that application of the 1949 Act which seems to us on this side, and, I believe, to a considerable number of hon. Members on the Government side, grossly unfair. So the maximum amount of disposable income that can be taken under the Bill is one-half of the disposable income. The amount of capital that can be taken is the whole of the disposable capital.
There was an anomaly in the application of the 1949 Act even before the Bill was brought before the House. The difference in treatment is, however, accentuated by the Bill. Whilst, before the Bill, the amount of income which could be taken was limited to one-half of the disposable income, under the Bill the amount is limited to one-third of the disposable income. Nevertheless, at the same time, the whole of the amount of capital is taken under the Bill and there

is no reduction in the proportion of the disposable capital which can be taken.
9.0 p.m.
I know that disregards are involved. There are disregards in respect of income and in respect of capital. I have seen the Regulations which come into operation today and deal with the question of disregards for dependants in respect of disposable capital. In cases of claims not involving litigation, as I understand it, no deduction, no disregard, no allowance, is made at all in respect of dependants; although we have disregards for allowances in respect of dependants in the case of income and in respect of dependants for capital in cases involving litigation. I do not know whether I have misunderstood the Regulations, but that appears to me to be the result.
If I am right, it means that we are taking yet a further smack at the person with small savings, because in the case of non-litigious work a person with small savings "is treated differently—and more hardly—from a person with income, or a person with capital when he goes into litigation. I shall be glad if the Solicitor-General will enlighten me about that.
Let me illustrate how this works out in practice. Let us take first the position of income. As the Attorney-General pointed out during the Second Reading debate, there are now reasonably substantial sums of income still qualifying for assistance under the Legal Aid Scheme. A single person with a gross income of up to £1,180 qualifies. A married person with three children and a gross income of up to £1,625 qualifies. But when we come to assess what is the contribution of these people towards legal aid, we first take into consideration certain disregards, such as allowances for dependants which I have mentioned, and so on. Then we leave the first £250 untouched and then the maximum contribution which may be made is one-third of the amount which is left, that is, one-third of the disposable income after making the deductions or disregards and after taking account of the first £250. During the Second Reading debate, by way of illustration, the Attorney-General took the example of a married person with three children and an income of £1,500 a year who made a maximum contribution of £123.


Let us compare that result. Let us take the position of the disposable capital. If a person has disposable capital, after taking account of certain disregards in the same way as with income—that is everything over £125—all that disposable capital goes towards legal aid in the form of a contribution. Whether the amount is £200 or up to the maximum enabling such a person to remain within the scheme at all—which is £500—the whole lot goes towards legal aid.
Such a person may even be in receipt of National Assistance. He may not even have the capital up to the National Assistance limit, because in the case of National Assistance—we shall deal with this matter in more detail when we discuss a later Amendment—there are various disregards, which are not disregarded under the Legal Aid Scheme. So a person may be in receipt of National Assistance and yet have to make a contribution of up to the £500 limit towards the Legal Aid Scheme. According to the way I have worked this out, a married person with three children would pay more in contributions towards the Legal Aid Scheme than a person with an income of £1,500. That simply does not appear to us to be just. It appears to be quite untenable to mulct persons with these small savings because they are called capital, of a greater amount than a person with a far larger income—an income of £1,500 a year—when the person with small savings may be on National Assistance.
I referred in Committee to a case mentioned on the Second Reading of the Bill by the hon. and learned Member for Warwick and Leamington (Mr. Hobson) —a most pathetic case—of a person who died during an operation in a hospital. Apparently the only asset that this person left was a policy of life insurance for £800. He left a widow with two boys, and the widow had no income of any description. Therefore, as the hon. and learned Member told the House, the widow could be given no assistance at all under the Legal Aid Scheme because she had capital above the £500 limit.
The Government refused to raise the limit as we proposed which would have enabled that widow to come within the scheme. Suppose she had capital of £500, disposable capital of over £125, would

be completely taken, subject in the case of litigation to certain allowances for the children. I think that the allowance is £60 to £75 per child under the new Regulations if there is litigation, but there is no allowance of that kind if there is no litigation. Then the whole of that capital, after the disregards, will be taken. Why should the whole of that capital be taken, whereas if it were disposable income of, say, £800 a year, very much greater than her capital, the amount to be taken would be limited to one-third of the income? It seems to us entirely unreasonable.
The kind of reason given for it is that small capital savings of this kind are intended to be a nest egg against contingencies—apparently, against precisely this kind of thing. I agree that if substantial sums of capital are involved it is only right that they should be drawn on for litigation, but that is not this kind of case. We are dealing with a case where the capital will be disregarded for the purposes of assessing the National Assistance which would be provided, yet we say that, although that person is on National Assistance, the whole of that person's disposable capital should be taken for the purpose of legal aid, subject to the allowances and disregards which I have mentioned.
The Rushcliffe Report dealt with this matter and with the principle which appears to me to be unexceptional. It says:
The underlying principle should be that while no one should be expected to make any payment if it would have the effect of materially diminishing an already exiguous income, people with substantial sums of capital must in general be prepared to pay their own law charges.
That seems a perfectly reasonable principle and the Rushcliffe Report deals with it in reference to a small tarder, but here we have a case which is not even that of a small trader. We have a case within the knowledge of the hon. and learned Member for Warwick and Leamington of a widow without any income at all, yet nevertheless the whole disposable capital is taken. That seems untenable.
We have people almost on the margin of subsistence and the capital is itself a very valuable source of income. The sums involved, producing £500 or something like 10s. a week, or £375 or something like 7s. a week, are small savings


and the income from them makes a very valuable contribution to the home. It is these people who have small savings with whom we are concerned. Once we get to those beyond the £500 limit generally speaking they are outside the Measure altogether.
All we ask is that these people should not be deprived of their small savings. They have not frittered their savings away and they should not be taken for the purposes of litigation, except the £125 minimum. All we ask is that these people with small savings should be treated in the same way as those who, perhaps, are substantially better off.

The Solicitor-General (Sir Jocelyn Simon): As the hon. and learned Member for Leicester, North-East (Sir L. Ungoed Thomas) pointed out, the effect of this Amendment is to reduce the maximum contribution from capital to one-third the amount by which the disposable capital exceeds £125 instead of the whole of the excess capital above £125.
As he pointed out, so far as income is concerned, the contribution of one-third of the excess over the new limit provides a sliding scale. The reason for that is that from the very inception of this scheme it has been recognised that a person's day-to-day commitments go up with his income and that it is impossible to require a contribution from income which would entirely alter his way of living. The question raised by this Amendment is whether the same consideration applies to capital and whether it is relevant. On the face of it, of course it is not.
The distinction goes back to the very inception of this scheme in the Rushcliffe Committee's Report. That was a Committee of outstanding distinction, on which my right hon. and learned Friend the Attorney-General himself served. The hon. and learned Member quoted a passage from that Report, but in paragraph 151 the Committee said:
In a scheme of this kind we feel that capital assets stand on a different footing and must be treated separately.
That is, separately from income. The Report went on:
We think it right to take a reasonably generous view of the amount of income a man should have before being expected to pay for legal expenses. We feel that, subject to the

safeguarding of a small "nest egg," a man involved in litigation can properly be expected to use his capital before requiring public aid. There are, however, two rather different types of cases to be considered.
In paragraph 152, the Committee goes on to say:
In the ordinary case of the man who in addition to an earned income on which he supports himself has a small amount of capital, we think that the rule should be that capital in excess of £25 in the case of a single man and £50 in the case of a married man should be regarded as available to defray costs incurred.
9.15 p.m.
In the first place, we have the argument that the requirement in respect of income above a certain figure should not apply to capital, and, in addition, one has that distinction recognised by the Rushcliffe Committee. Indeed, that Committee recommended a nest egg of only £25 for a single man and £50 for a married man.
It does not stand only on Rushcliffe. When the Report was implemented, under the Legal Aid (Assessment of Resources) Regulations, 1950, made under the 1949 Act, there was a distinction between capital and income, and the nest-egg there was £75 for a single man and £150 for a married man. The whole sum above those figures was liable in contribution.
The hon. and learned Gentleman says that that has been administered rigidly and the whole of the excess has been taken. With very great respect, that is not so. The National Assistance Board has shown a wise flexibility, and it certainly does not insist on taking in contribution the whole of the excess, if it would cause real hardship to do so.

Sir L. Ungoed-Thomas: Sir L. Ungoed-Thomas rose—

The Solicitor-General: I think the hon. and learned Gentleman may find that I shall deal with his remaining doubts as I continue my speech.
Thus, we have the general principle, the view expressed by the Rushcliffe Committee, and what was provided in the original Act and Regulations. One comes now to the Lord Chancellor's Advisory Committee which advised last year on the Financial Provisions of the Legal Aid and Advice Act, 1949, and the Legal Aid (Assessment of Resources) Regulations, 1950. This Committee also, looking at this matter, recognised the


fundamental difference between income and capital. In paragraph 8 of its Report, it said:
We do not think that the same considerations apply under the Legal Aid Scheme as apply for national assistance. Capital is accumulated, as the Rushcliffe Committee recognised, as a 'nest egg' for dealing with emergencies, and legal proceedings if undertaken in good faith are emergencies for which capital should be used. But we think that some regard has to be had to the decline in money values and to the desirability of encouraging people to save. We therefore recommend that the Act should be amended to provide for no contribution from capital below £125.
Clause 1 (2, b) of the Bill provides for an increase in the nest egg from £75 to £125. The hon. and learned Gentleman says that all he asks us to do is to go back to 1949 values, and we have refused to go back to 1947 values. The Rushcliffe Committee, of course, recommended £25 for the single man. We are enacting a provision for £125 for the single man. This is five times the amount recommended by the Rushcliffe Committee. Therefore, if that is the test, we have more than taken account of any fall in the value of money. There has been a considerable increase in real terms.
The matter does not rest there. The Advisory Committee also recommended an increase in the nest egg where the applicant has dependants. Up to now, following the Rushcliffe Committee's recommendations, there has been only one further allowance of £75 for a married person irrespective of the number of children and other dependants he might have. In paragraph 14 the Advisory Committee recommended that there should be further allowances of £50 in respect of a child or second dependant and £25 for each dependant above two. My noble and learned friend the Lord Chancellor intends to implement that recommendation when he shortly amends the Assessment of Resources Regulations. The nest egg for a married couple with two children will be £275 instead of the present £150, over five times the amount recommended by the Rushcliffe Committee.
Again, the matter does not rest there, because that nest egg is disposable, not gross, capital. Besides the allowance for dependants to which I have referred, there are many capital resources which are ignored—household furniture and

effects, for example, a television set, obviously articles of personal clothing and obviously personal tools and equipment for trade. But the value of a dwelling house owned and occupied by the applicant is ignored up to the first £2,000 and only one-half of the equity of redemption over £2,000 is taken into account.
My noble and learned Friend has in mind to amend this provision so as to allow the whole of the first £3,000 of the house's value instead of the first £2,000. It is therefore unreal for the hon. and learned Member to talk about taking the last of a person's small savings when it is considered that the disregard in the case of a man with a dwelling house is at present £2,000 which will go up to £3,000.
The Board, in addition, has a wide discretionary power to ignore capital in special circumstances, and it exercises that power. The most usual circumstance in which it exercises that discretion is in the case of someone with a low disposable income and some disposable capital. That covers the sort of case to which the hon. and learned Member referred of someone with some small capital but who is on National Assistance—in other words, having no income. It is simply not true that the National Assistance Board in those circumstances insists on taking the whole of the capital. On the contrary, as a matter of practice, it allows a further £75 where the disposable income is less than the present free income limit of £156 a year. After the Bill, when the free income limit goes up to £250, it will allow a further £125 free capital where income is below that figure.
Again, above the free income limit the special allowance is reduced pound for pound with rising income. The effect will be that someone with a disposable income of £250 will get a further £125 capital allowance, and someone with a disposable income of £350 will get a further £25 capital allowance. Again, the hon. and learned Gentleman said that if the capital falls outside the limit of £500 he will not get legal aid. That is simply not true, as we found in Committee. It is purely a discretionary limit for the National Assistance Board to apply.
Let me give a specimen case so that the Committee will see how it works


out. Take a single person with two children.

Sir L. Ungoed-Thomas: The hon. and learned Gentleman has just made a statement about the amount which is discretionary over the £500. Of course, as the Solicitor-General knows very well, what the Advisory Committee said in that special Report which it was asked to give was that
… the Committees grant legal aid where disposable capital is larger than £500 if in their view the cost of the proceedings will be greater than the maximum contribution which the applicant would pay if he got legal aid.
It is in that case and in that case only. It is not true in general application. There is not a general discretion over £500. It is so simply where the cost of litigation exceeds the amount the applicant would have got.

The Solicitor-General: We discussed this very fully in Committee, and the way that the £500 works out is to enable the area committees to refuse legal aid where the whole of the costs will be covered by the contribution.
However, that is not immediately relevant to what we were discussing, and I was going to give a specimen case. I am told that I said a single person with two children. Perhaps I had better say, one married person with two children with a gross income of £750, and £21 family allowance, a total of £771. The maximum contribution from income will now be £21 10s. If there were capital in that case, the applicant would receive £125 personal allowance, £75 for the first child and £50 for the second. Because the disposable income figure qualifies that applicant for the further special allowance which I have just referred to, a further £60 10s. would be allowed. No contribution from capital would in those circumstances be required unless his capital were more than £310 10s., and that is, in addition, after disregarding the value of his dwelling-house.
In those circumstances, it is really unreal for the hon. and learned Gentleman to speak as if the scheme were framed so as to screw the last penny of capital out of the small saver. In the end it really comes to this, that quite different considerations apply to the treatment of capital under the National Assistance scheme and under this

scheme. In the National Assistance scheme it is frequently a permanent or semi-permanent situation, and, as I ventured to point out in Committee, it is reasonable to expect then that capital should be used in small amounts to eke out income, and it is unreasonable to expect it to be completely expended before National Assistance becomes available; but litigation is quite different.
Litigation is unlikely, one hopes, to be recurrent. This, as the Advisory Committee itself said, is an emergency, of exactly the type for which capital is accumulated. Under the National Assistance scheme it is to the saving of the taxpayer if capital is taken in lieu of assistance, but in litigation the litigant and not the taxpayer is going to get something back at the end of the litigation and he does in fact get it back in 85 per cent. of the cases in the Queen's Bench Division.
It really comes to this: is it reasonable to tax somebody whose means may be very much less than the means of the sort of person whom I have been describing, with the disregards, in order to let somebody go into litigation with part of the risk insured, he getting the whole of the benefit of that litigation? It seems to me unfair to the small taxpayer to do that, and for that reason I ask the Committee to resist the Amendment.

9.30 p.m.

Mr. Graham Page: I did not have the privilege of serving on the Standing Committee, though I had hoped to do so and had collected a number of instances of hardship resulting from applicants for legal aid having what I would call a small amount of capital. I do not propose to detain the Committee by giving those examples now beyond saying that they mainly consisted of retirement pensioners in rented houses. I am quite aware of the disregard for those who own a house, but so frequently one finds a couple of old-age pensioners living merely on their pensions with something in excess of £500 savings and living in a rented house and, therefore, not getting any disregard for their dwelling.
Whatever figures my hon. and learned Friend the Solicitor-General may have put to the Committee on this occasion—


and he has rather blinded some of us with those figures—there are instances of real hardship to pensioners. There may not be hardship to those entitled to the disregards—married couples with children living in their own house. It may work out quite well for them, but it does not work out well for the pensioner who is involved in litigation when he compares his situation with that of a man with an income of £1,500 who because he has children and has his own house gets the disregards and the benefit of legal aid. The couple with a retirement pension and with a little over £500 are refused the legal aid certificate. That cannot be right.
The principle on which the House of Commons decided, as my hon. and learned Friend said, was that those of substantial income should be given legal aid because a person sets his commitments according to his income and when any emergency arises and he finds himself involved in litigation it is perhaps unfair to ask him to set aside those commitments and devote his income to that litigation. Exactly the same argument applies to the retirement pensioners. They have set aside a part of capital and we know perfectly well that if they go on living they will use that capital as their income. My hon. and learned Friend mentioned the decline in money value and, of course, any reasonable retirement pensioner looks upon that capital as a nest-egg—as income, not capital. Retirement pensioners know that they have to draw on it in due course. We must recognise that and recognise that these savings are needed for use as income as these people get on in age.
Whatever these rules may be that my hon. and learned Friend has been putting before the Committee, those who practise and have examples before them of applications which have been refused know that there is hardship in these cases. I cannot help but support the hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas) in his plea in this case.

Mr. F. H. Hayman: After listening to the debate, I begin to wonder whether anybody benefits at all from legal aid. A case came to my notice not long ago of

a disabled person with a very low income who had received notice to quit from his rented house. Not only was the notice served on him but it was served separately on his wife. He received legal aid. They were assessed by the National Assistance Board and in the end it came out—though I speak entirely from memory—that the two could be assessed to pay up to £36 each.
The case came before the learned judge in the county court and he deferred consideration of it for a period. A sum of that kind to a comparatively elderly, severely disabled person and his wife was frightening indeed to them, as it was to me. As a result of inquiries, I gathered that these costs are taxed by a taxing master at the maximum which could legally be charged whereas, if the case went before an ordinary solicitor, he would probably assess them in his own way at far less than would the taxing master. As I say, it gave me a shock, and I seriously wonder whether it is worth going to the National Assistance Board in any case.

Mr. Ede: I listened to what was said by my hon. and learned Friend the Member for Leicester, North-East (Sir L. Ungoed-Thomas) and I wondered how far the Solicitor-General would dispose of one case. I know that the answer I shall get from most of the galaxy of legal talent I see before me will be that hard cases make bad law in any event. The hon. and learned Gentleman did not tell us about what happened to the widow with the £800 capital and no income, who had two children. I gathered from what my hon. and learned Friend said that, because she had over £500 capital, she was refused legal aid. I understand that the case was mentioned to the Committee by the hon. and learned Gentleman the Member for Warwick and Leamington (Mr. Hobson) and so I assume that the Solicitor-General had heard of it before.
I should like to know the answer in that case, because it seems to me Chat it is an extreme case of the kind brought forward by the hon. Member for Crosby (Mr. Page), where the person will regard the £800 as income. I imagine that a widow with £800, with two boys to bring up and a house and clothing to provide for them, will ask herself, "How long


is this going to last? "She will use it week by week, hoping that by the time she exhausts it she will either have found employment or something will have turned up to relieve her of getting into the position where, never having had an income of her own, she will have no capital on which to draw. What happened in that case? If the widow was denied legal aid, how could any lawyer argue that case? Clearly no lawyer would get any money out of it, and certainly if it were a case that ought to be litigated, he should have something.

The Solicitor-General: The right hon. Gentleman is quite right in saying that this case was put by my hon. and learned Friend the Member for Warwick and Leamington (Mr. Hobson) during the Second Reading debate. That case does not relate to this Amendment, which relates to the contribution from capital which has to be made by those who are admitted to legal aid and not to those who should be excluded from legal aid. I do not know what actually happened in that case, whether there were any special circumstances or whether possibly the Act was over-rigidly administered. I can tell the right hon. Gentleman how it will work out under the new Regulations which I said in Committee my noble Friend proposes to make.
Take a woman like that. She would have an allowance, first of all, of £125 for herself, £75 for her first dependant and £50 for her second dependant. In addition, since she has no income at all, she would have a further £125 allowance of free capital. I make that come to £375 in allowances, which would certainly bring her well within the limit of £500.

Mr. W. R. Rees-Davies: I am bound to say that I have some appreciation of the argument of my hon. Friend the Member for Crosby (Mr. Page) in this matter, but at the same time I do not think anyone can say that the Government are in any sense inconsistent in their approach to this matter, arising as it does from the background of the Rushcliffe Committee.
We are discussing now the question of a person's contribution, having regard to the amount of capital which is disposable, and, as approached from that

angle, the view expressed by the Government is that very little of one's capital shall be regarded as a nest egg, certainly in the light of modern conditions, and that primarily it shall be treated as a matter of income, and that a person in a normal income position shall be able to get legal aid to a large degree in the form of hire purchase investment; that is to say, it is nothing more in the average divorce case than the right to proceed with one's case and gradually to recover from the applicant moneys which he pays by monthly instalments. As it runs today, it is a method of hire purchase.
I want to draw attention to something which shows how great injustice can occur. Frankly, it is amazing to me that this Bill should have passed its Second Reading, gone through its Committee stage and reached this stage without anybody drawing to the attention of the House the position so far as disposable capital is concerned. The position at the present time is this. For example, if one is a person who has £125 in the world from all sources, one is quite unable to go to the highest tribunals in the land. It so happens that if one's disposable capital is £125, one cannot go to the House of Lords and one cannot go to the Privy Council. One has no means to go there, and that is the situation about disposable capital. When my right hon. and learned Friend indicates that he wants to impose certain limits on disposable capital in actions in the county court, the High Court and the Divorce Court, and he feels that it is not right to raise these limits, I certainly am not prepared to dissent from him, but when, in fact, he is unable to find money for people who have received the leave of the Court of Appeal and the Privy Council to go there, having obtained a judgment in the first court for thousands of pounds, he is perpetrating a very serious injustice, and it is about time it was put right.
I have read and carefully considered the whole matter, and have even gone to the extent of asking a number of the best-known solicitors in London whether they would be prepared to act for nothing in such cases on grounds of prestige. I would rather not mention any names, but, universally, they indicated that they would not do so. I know that


members of the Bar are willing to do so in certain circumstances. Whether they are willing or not, the House ought to consider these figures.
First of all, if one wants to go to the House of Lords today, one's disposable capital to start with must be £700—£200 cash and further recognisances of £500. In addition to that, one has to go through an indignity, and I call it an indignity because it is an affront to any civilised society today.
I will read from the House of Lords, Form of Appeal, Method of Procedure and Standing Orders, paragraph 10 (iii):
The petition must be supported by an affidavit of poverty by the Petitioner and also by a certificate of poverty signed by two responsible persons of official or professional standing who have personal knowledge of the Petitioner's lack of means.
They must testify that the person is telling the truth when he says that he has less than £100. These are the cases which have led to a hardship which is far greater than anything which would happen to people in the county court or elsewhere.
9.45 p.m.
If we are proud of the highest tribunals of the land and of the fact that leave to appeal is given to those tribunals, from the Court of Appeal or, in the case of the Privy Council, often from the Commonwealth, then I find it very surprising that their Lordships passed the Bill without ensuring that the highest tribunals in the land are those where the liberty of the subject is most strongly defended.
I say little about the position of solicitors in this matter, although I speak in measured language when I say that I know that few, if any, solicitors—and I am speaking in the presence of some very eminent solicitors—would be prepared to take cases to the House of Lords, with all the time which is involved, for nothing. I know members of the Bar in number who would do so. All of us may well do many hours of work for nothing. But the plea I make in this respect arises from the hardship which is involved in this question of disposable capital. I know of three cases at present where, having been given leave to go to the highest tribunal, people are unable to do so because they have not the

money to meet the bills—and these bills must be paid.
Let us assume that they have £500 to £1,000 disposable capital available to them. First they have to find £700. In addition, the printing costs in the House of Lords are between £1,000 and £1,500. They must be met by the appellant. By the time people have attempted to meet these bills, they will be unable to go to the tribunal. It is a great surprise to me that I should have to raise the matter at this stage.

The Chairman: I am having difficulty in relating the hon. Member's argument to the Amendment.

Mr. Rees-Davies: I am saying that if hon. Members wish to raise the limits of disposable capital, I am not prepared to support arguments of that kind under any circumstances until they are prepared to invite the Government to put their house in order and to put the position right in the highest courts of the land. I am submitting that this ought to have priority over the other cases.
Today the retired person may often be drawn into litigation. For instance, a widow may wish to retain her house against eviction. Such people very often have a small unearned income and are living on capital. If any change is made, I should prefer to see a lower amount for the income and a higher amount for the disposable capital, and that is directly in line with the Amendment. But I cannot support either view here, or the Bill, as it appears before us, until the House is prepared to give more attention to an injustice which I am sure many do not realise exists. My right hon. and learned Friend the Attorney-General on Second Reading indicated the courts which had been introduced into the provisions. He spoke of Bristol Tolzey Court, sheriffs' courts and courts nobody had heard of and into which very few people go. But not a word was spoken of the two greatest courts of the land and cases of the kind which I have described.
These hardships arise irrespective of the fact that lawyers may be prepared to work for nothing. It is very good that they should do so from time to time— good for their consciences—and it is probably something which the House warmly welcomes. But even so, there


are still people who are unable to take advantage of the benefit of free legal counsel and even a free solicitor because, as a result of the Act of 1893, it was provided that in these cases the disposable capital should be £100 and no more. These cases can be contrasted with the winged words of the hon. Member in calling attention to questions of disposable capital. What has been said by hon. Members falls into insignificance against the hardship that can be created in cases like that of Lady Hoare and the difficulties that arise in cases like that of Colonel Wintle and others I could mention I hope that another place, if not the House, will in due course seek to put this in order and see that we have on the Statute Book the whole proper provisions.
We have had my hon. and learned Friend the Solicitor-General presenting his case with the lucidity and fairness one always gets from him. Even so, one is unable to extract or understand the precise figures, particularly if one is an ordinary layman or someone not versed in this subject. It is not surprising that one finds very few who know what is meant by disposable income or disposable capital. I hope that in the next year or two i: may be possible to incorporate in a place where they can easily be found regulations which would indicate precisely how the disposable capital—

The Deputy-Speaker: The hon. Member is getting very far from dealing with the Amendment.

Sir L. Ungoed-Thomas: I have a great deal of sympathy with the hon. Member for the Isle of Thanet (Mr. Rees-Davies) and agree that it is most desirable to extend the legal aid provisions to the House of Lords. We said so on Second Reading. However, we took the view that this Bill was not appropriate to deal with that aspect of the scheme. We are dealing with alterations of the financial provisions, and it was extremely adroit of him to get so much within the four corners of the rules of order.
It is not our object in this Amendment, and nor have we ever suggested, that the Legal Aid Scheme is screwing the last penny out of capital. I made it clear that the first £125 of capital, for instance, was entirely free from legal aid contribution. The point we make is that small

savings capital is, compared with substantial sums of income, most unfairly treated. If the Solicitor-General is not seized of that point—unless he is not seized of it because he is adroit in his advocacy—then I hope he will be seized of it now. The kind of case we are concerned with is that put forward by the hon. and learned Member for Warwick and Leamington (Mr. Hobson) and that of the pensioner put forward by the hon. Member for Crosby (Mr. Page).
The Solicitor-General made a great deal of play with the raising of the minimum amount from £75 to £125, whereby capital sums beneath that amount were excluded from the scheme. Then he said that that was considerably more than the sum mentioned in the Rushcliffe Report. I agree, but he did not go on to read the last sentence of the quotation which he made from the Report of the Advisory Committee, dealing with this question of £125. That sentence was this:
This is rather less than the effect of the increase in the cost of living since 1946.
I was generous—if I may so describe myself—an saying that this scheme, by and large in this Bill, restored the 1949 value. There is nothing much in the £125 point.
He went on to say that there were disregards and allowances made for dependants. Of course there are. I referred to disregards and allowances made for dependants, but they are also made in the case of income and that does not touch the case which we are making against the Government, namely, that they are treating small savings unfairly compared with substantial income.
I invited him to deal with the Regulations which the Government have made in the case of non-litigious cases. It seemed to me that in those Regulations no allowances were made for dependants, although allowances are made for dependants in the case of income and in the case of litigation. I cannot understand why no allowances are made for dependants in respect of capital, and capital only, in non-litigious cases. All the hon. and learned Gentleman said about dependants was not even applicable to the non-litigious class of capital applicants.
Dealing with dependants and disregards, the Solicitor-General referred to


dwelling houses and so on, but there are comparable disregards in the case of income, too. What I invited him to do was to compare the unfairness resulting from only a one-third proportion being taken in the case of substantial sums of income, while the whole of the capital was taken in quite small sums of capital.
The third point was in regard to the Rushcliffe Report. The hon. and learned Gentleman again referred to the £125 limit, which was £75 in 1949 Act. In one of the passages which the hon. and learned Gentleman quoted, the Rushcliffe Report recognised that there are two different classes of capital to be considered. The one case, which the Report 'said was the ordinary case, was that in which it recommended the £25 minimum amount, which in the 1949 Act was the £75 minimum amount. We are concerned with the principle not of that, but of the other case. Where there is a substantial sum of income and a substantial sum of capital, what matters is the overall resulting contribution. It may be quite reasonably fair where there is substantial income in a particular case to take the whole of the disposable capital where capital sums are comparatively small, but it is not fair to take the whole of the capital in cases where income is small and where, as the hon. Member for Crosby said, the poor person has to resort to capital as a means of supplementing income and making both ends meet.

The Solicitor-General: The hon. and learned Gentleman will have in mind that I dealt specifically with that second class of case when I dealt with the discretion which lies in the National Assistance Board.

Sir L. Ungoed-Thomas: I am coming to that very point.
In the second class of case, the Rushcliffe Report clearly laid down the principle which I quoted and which I now repeat because I want the Government to recognise it. It is the whole principle underlying the Amendment and is that
… while no one should be expected to make any payment if it would have the effect of materially diminishing an already exiguous income"—
which is what it does when there is very small income and the capital is a source

of a very valuable 10s. a week income to the person dependent on it—
people with substantial sums of capital must in general be prepared to pay their own law charges".

Mr. Philip Bell: We are in difficulty when we talk about living on capital because it depends on how old the person who has to live on it is— whether it is a sick person aged 50 with only £500 of capital or a sick person aged 85 with £500 capital. The spreading of the capital if it is to be lived on depends a great deal on the situation.

Sir L. Ungoed-Thomas: I hope that I do not treat the hon. and learned Gentleman unfairly if I say that that is very much a lawyer's point. I fail to recognise the human distinction between the two. If there is a person of 50 who is sick and dependent on capital to eke out income, he should be treated in exactly the same way as the person of 85.
I am coming to the point which the Solicitor-General mentioned about the amount of capital which is in fact disregarded. He said that the National Assistance Board took various factors into consideration in deciding whether to take the whole of the capital or some proportion of it and that—

It being Ten o'clock The CHAIRMAN left the Chair to report Progress and ask leave to sit again.

Committee report Progress.

Proceedings on the Legal Aid Bill exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[The Solicitor-General.]

Bill again considered in Committee.

Sir L. Ungoed-Thomas: I am anxious to understand the Solicitor-General's argument on this part of his case. As I understand it, he is now saying that, apart from dependants' allowances and disregards such as the value of a house which are taken into consideration by the National Assistance Board, it may take into consideration all the circumstances of the case and take a smaller proportion than the whole of the resulting disposable income.

The Solicitor-General: It is rather more. The Board gives a further allowance at its discretion, although on an


unstated scale, before arriving at the disposable income which it reports to the legal aid committee.

Sir L. Ungoed-Thomas: No wonder, as the hon. Member for the Isle of Thanet (Mr. Rees-Davies) said, it is difficult to follow the intricacies of this. I am at a complete loss to understand the significance of the Solicitor-General's observations. Apparently the Board makes some allowances which are not covered in any regulations, about which we have no knowledge, which it exercises in accordance with some scale which is private to itself and known to nobody else, which we cannot criticise in this House, and which is utterly unknown. We do not know whether it is fair. We do not know whether it is exercised on the same principle by the different area committees, or how on earth the thing works out.
We are now told, for the first time, at this stage of the Bill, that the National Assistance Board exercises some discretion of that kind. This point was put expressly to the Solicitor-General in Committee. My hon. Friends and I pressed him about it. We wanted to know whether, after the £125 minimum capita] which was allowed, the whole of the difference between £125 and £500 total disposable capital, namely, £375, was taken, or was not taken, for legal aid purposes. I have the answer here. After considerable questioning the Solicitor-General made it clear that the whole lot was taken, without any indication that there was any discretion in the National Assistance Board, that something less than a proportion was taken, or anything of that kind.
When we made the point that the whole of the amount was taken, and not just a mere fraction of it, there was never a glimmer of suggestion that less than the whole was taken. Today for the first time we are told that the National Assistance Board, in some utterly unknown way, according to some utterly unknown criterion, exercises some discretion which we do not know, and about which we are not entitled to ask. We do not know whether it is just, or unjust, or what is the amount.

The Solicitor-General: The hon. and learned Gentleman does not need to get so excited about this.

Dame Irene Ward: Yes, he does.

The Solicitor-General: It is the perfectly plain distinction that we have investigated time and again in the Bill between gross capital and disposable capital. It is true that if one takes £125 and the figure of £500, which is all that we were considering in the Amendments in Committee, the whole of that difference can be taken. What we are discussing here is how to arrive at disposable capital. There are other things besides the £125. That is only the personal allowance. There is also the allowance in respect of dependants. There is also the flexibility of which, I should have thought, every hon. Member knew —the discretion vested in the National Assistance Board. If the discretion of the National Assistance Board is new to the hon. and learned Member, I can only say that I am very much surprised.

Sir L. Ungoed-Thomas: All that this means is that the discretion is exercised before what the Solicitor-General calls the disposable capital is arrived at instead of being exercised after the disposable capital is arrived at.
The disregards and the allowances are laid down in the Regulations. We know what the disregards and the dependants' allowances are and we know what factors have to be taken into consideration, yet we are told that there is some unknown element, of which we know nothing at all, which is to be taken into consideration. We do not know how it is exercised and all my criticisms of it stand. I should like to know exactly why that is not provided for and why we do not have something provided for which we in the House of Commons can see and get at and be in a position to criticise and see that the administration is properly enforced.
The Solicitor-General has dealt with the Warwick and Leamington case with some enlightening observations. He told us, in answer to my right hon. Friend the Member for South Shields (Mr. Ede), that nowadays in that case the £125 general allowance would be deducted— we all know about that—and that under the Regulations which are now proposed to be made, but which are not yet in operation, there will be £75 for the first dependant and £50 for the second dependant, but that these allowances are to


operate only in litigious cases under the Regulations which have not been made and not in non-litigious cases operating under the Regulations which have already been made. Apparently our discussion on the Amendments may have had some beneficial effect.
The Solicitor-General said that there was then to be an allowance of £125, as the lady in the case had no income. Let us consider that. One hundred and twenty-five pounds is one-third of the difference between the £125 minimum allowance which is allowed in all cases and the £500 maximum above which one goes outside the Legal Aid Scheme. So that, we are told, in the case where there is no income at all, one-third of the income is to be allowed.

Mr. Philip Bell: Capital, not income.

Sir L. Ungoed-Thomas: I am sorry; I meant capital, not income. One-third of the capital is to be allowed. We very much welcome that. It is a step forward, which we very much welcome, on the lines of our Amendment. It is an admirable thing and we welcome the concession.
What happens if the lady, instead of having no income, has 10s. a week? Is there any proportional scaling or is the one-third allowance to be given irrespective of income, or only where there is no income? I hope we shall be given an answer to this. It may affect the way in which we act on the Amendment.
We are concerned precisely with these hardship cases as mentioned by the hon. and learned Member for Warwick and Leamington (Mr. Hobson) and by my right hon. Friend the Member for South Shields. These are cases which cannot, as it were, be laughed out of court. They are cases of substantial hardship to people of poor means who are hit in their poverty simply because they happen to have a little capital instead of a little income. We say that cases of capital and income, if they come within the limits of the scheme, should be dealt with in the same way. Both represent small sums. It is utterly unrealistic to refer to these cases as "nest egg" cases in which we should be entitled to take the whole amount up to a certain figure.
Dependants' allowances are taken into consideration, because it is recognised

that they should be considered irrespective of other matters, whether it is capital, income or whatever it happens to be. But when those deductions are made, we are dealing with what is left. We say that if they are made, people with small means, whether it is capital or income, should be dealt with in exactly the same way. I hope that the Solicitor-General will be able to give us more encouraging news about this £125 which he has mentioned as being allowed under the National Assistance Scheme—or rather which it is proposed to allow under the Regulations to be made by his right hon. and learned Friend. That would go a considerable way to meeting the purpose of the Amendment.

The Solicitor-General: I think I can reply easily to the points put by the hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas). I did in fact give the answer to what happens about £125 where there is this sliding scale, but I realise that I gave it in a spate of figures and it must have been extremely difficult to follow.
The position is that where the disposable income is less than the free income limit—I will give what is proposed to be done rather than the present figure in order to keep it simple—Dhey allow a further £125 free capital where income is below that figure. So it follows that up to £250 income there is a further capital allowance of £125. Above that free income figure of £250 the special allowance is reduced £ for £ with the rise in income. I gave the example of someone with disposable income of £350 who will get a further £25 capital allowance. The income has risen by £100 so the capital allowance has been reduced by £100.
The hon. and learned Gentleman expressed surprise that this was the first time we had heard of this matter. It is, of course, the first time it has been relevant in these debates. But it is no new thing to the House of Commons. Indeed, the discretion given to the National Assistance Board in this very regard is given in the Legal Aid (Assessment of Resources) Regulations, 1950, Second Schedule, Part II, paragraph 5, which reads:
'Where there are special circumstances the amount to be deducted from the applicant's capital resources may be adjusted as is appropriate to meet those circumstances.


In view of that explanation, I hope the hon. and learned Gentleman will feel that there is sufficient flexibility to deal with the cases of small capital to which he has drawn the attention of the Committee.

10.15 p.m.

Dame Irene Ward: I always think it dangerous for a layman to intervene in what certainly appears to be a lawyers' argument. My dilemma becomes greater because, owing to other commitments, I was unable to be present to hear the whole of the argument. On coming into the Chamber I heard my hon. Friend the Member for Crosby (Mr. Page) talking about people on retirement pensions and I thought at once of those living on small fixed incomes. I have listened very patiently to the arguments which have been put forward and I do not feel satisfied on this matter.
I also listened very carefully to what the Solicitor-General said about dependants' allowances. What he said may well be so in the case of people who have dependants; but, if I assess rightly the case put forward by my hon. Friend the Member for Crosby, it is the people who no longer have dependants who will not obtain the benefit of these allowances. Therefore, the older one gets, the less help one appears to get under this scheme. That seems to be very unfair and very unfortunate, because it hits the whole range of people who have retired on relatively small pensions. I am not necessarily speaking of retirement pensions within the framework of the National Insurance Act, but of the whole range of people who retire on small fixed incomes and who will not have the benefit of dependants' allowance.
I also listened to the argument about the steps that will be taken by the National Assistance Board. When one is talking about people who want to have recourse to legal aid, there are masses of people who, in my interpretation of small fixed incomes, do not come within the range of the National Assistance Board.

The Solicitor-General: I am sure that my hon. Friend will know that very-body applying for legal aid has to have his resources investigated by the National Assistance Board.

Dame Irene Ward: Of course, I know that the National Assistance Board is the operating body for the investigations. Perhaps I have interpreted my hon. Friend and my hon. and learned Friend incorrectly, but there has been a very long argument about the amount of disposable capital and disposable income. Large numbers of people have very small incomes, and, if I understood it correctly, the case put by the hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas) was in relation to people with small incomes as well as people with much larger incomes.
I have always found, when speaking about those living on small fixed incomes who come within the purview of legal aid, that the Government argue that it is very difficult to find ways and means of helping them. I thought that under the scheme put forward today, and after hearing the arguments put forward by my hon. Friend the Member for Crosby and from the Opposition Front Bench, we might have gone much further towards helping those living on small fixed incomes. I do not feel that the explanations given have been entirely satisfactory. Presumably the advice given will be to wait for the regulations. I have waited so long with regard to small fixed incomes, without any results, that I am not particularly hopeful that when the regulations come forward they will help us very much.
The next argument will be that we cannot alter the regulations because they relate to the basic foundations of the Bill. I would have much preferred the Solicitor-General to have been more forthcoming. I hope that, even at this late stage, we may get something a little more satisfactory in the interests of a great many people. I am delighted that today so many of the legal profession are trying to protect the interests of those living on small fixed incomes. I hope that the Solicitor-General will be able to be more forthcoming than he appears to have been in the arguments which he has put forward.

Mr. Ede: I wish to thank the hon. and learned Gentleman for the careful way in which he explained to my untutored mind the way in which the widow who was the protégée originally of the hon. and learned Member for Warwick and


Leamington (Mr. Hobson) would fare under the new arrangements. I understand that she has £800 capital and is entitled to £375, that is, three groups of £125 each, leaving her £425. Suppose she had £875 or, to give her a little bit for luck, £900.

Mr. Philip Bell: If by some accident she happened to expend some of her capital on a fur coat or a cottage, she would be all right.

Mr. Ede: That is the kind of intervention one would expect the hon. and learned Member for Bolton, East (Mr. Philip Bell) to make on what I regard as a very human case. I hope he will take it from me that widows with children and only £800 in the world do not buy either fur coats or cottages.

Mr. Philip Bell: It is cheaper than litigation.

Mr. Page: I think my hon. and learned Friend the Member for Bolton, East (Mr. Philip Bell) was endeavouring to be constructive and to assist the argument of the right hon. Member by showing how ridiculous the position is in that a person who squanders money on fur coats or something like that can get the benefit of legal aid whereas the widow in this case was refused it.

Mr. Ede: I do not want to detain the Committee for very long. Hon. Members are always very kind to me and I want to get home as much as do other hon. Members. Do I understand that if this widow had £900 instead of £800 she would still be debarred? That is what I understood the mathematics which the Solicitor-General so carefully explained to me would prove, that she would still be excluded.
I have frequently had to deal with widows of teachers in cases where, if the woman has not been a teacher herself, all she has is the gratuity which comes out of the superannuation fund. Such a woman has to say, "I have these few hundreds of pounds and two boys to look after. I shall have to spend so

much each week to keep myself and the two boys alive, so much to keep us housed, fed and clothed." They work it out and hope that by the time that small capital is exhausted they will have found some means of employment or can persuade the benevolent orphans' fund of the National Union of Teachers to take the boys off her hands.
These are cases of great poignancy, in my experience, and, judging by the explanation which the hon. and learned Gentleman has given, it does not seem to me that the Government, in the arrangements they have made, have grasped the fact that there are very many people who, perhaps as the result of a motor car accident or because some woman's husband has been knocked down by a bus, are plunged from lives of comfort and reasonable security into acute mental agony as they contemplate the future.

The Solicitor-General: I apologise for detaining the Committee, but the right hon. Member for South Shields (Mr. Ede) always puts his requests for an intervention very courteously, and, of course, he rightly says that these are poignant cases. Indeed, wherever one draws the line, there are always bound to be difficult cases.
The right hon. Gentleman has asked me a question which does not immediately arise on the Amendment. Let us suppose that the widow had, let us say, a capital of £900. Would she necessarily be refused legal aid? The answer is "No"; it is still discretionary. Under the proviso to Section 2 (1) of the 1949 Act, a person may be refused legal aid if he has a disposable capital of more than £500 and it appears that he can afford to proceed without legal aid. That still leaves some discretion in the National Assistance Board, although, obviously, there comes a time when it has to draw a line.

Amendment negatived.

Clause ordered to stand part of the Bill.

New Clause.—(ASCERTAINMENT OF MAXIMUM CONTRIBUTION.)

From the amount which, but for the provisions of this section, would be the maximum amount of a person's contribution in respect of capital to the Legal Aid Fund in respect of any proceedings, there shall be deducted a sum equivalent to the assets and capital resources, which by virtue of section five of and paragraphs 2, 3, 6, 7, 8 and 9 of the Second Schedule to the National Assistance Act, 1948, would be disregarded in relation to that person for the purposes of that Act; and the maximum amount of that person's contribution shall be. the first-mentioned amount less the said sum.—[Mr. Mitchison.]

Brought up, and read the First time.

Mr. G. R. Mitchison: I beg to move, That the Clause be read a Second time.
The effect of this new Clause, very shortly, is this. If it be accepted, the first step, in order to ascertain a person's contribution, will be to work it out according to the rest of this Bill and preceding legislation. The next step will be to deduct a sum equal to the assets and capital resources which would have been disregarded under the National Assistance Act. The result, after that deduction, will be the actual contribution.
The Solicitor-General has just explained to us on another Amendment the infinite kindness of the Government which does not deprive an applicant for National Assistance of either his bed or his trousers. I recognise that there are certain disregards, domestic resources of one kind and another, and so forth. I recognise also that, in suggesting this new Clause, I have the full weight of all authority against me. The authority begins with the right hon. and learned Gentleman the Attorney-General as a member of the Rushcliffe Committee, and it ends with what we have heard from the hon. and learned Gentleman the Solicitor-General tonight. On the other hand, I have in my favour obvious good sense, good logic, and I hope, a certain amount of reason, which I propose to direct to the hon. and learned Gentleman.
10.30 p.m.
All I have to deal with really is the nest egg argument. The hon. and learned Gentleman, on Second Reading,

when this suggestion was made to him, simply followed the language of the Rushcliffe Committee in saying that the two cases were different. What he said was this:
 The hon. and learned Gentleman traced that back"—
that is, the proviso about the £500—
to the recommendation of the Rushcliffe Committee, which said that the capital could be expected to be called on if there were a sudden emergency. It seems to me that the sudden emergency of legislation is quite different"—
I think he meant litigation—
from the emergency which calls in the National Assistance Board.
On that, which is the National Assistance case:
That is a continuing emergency in a sense, and, therefore, it is reasonable to have a wider disregard from the point of view of capital than under the Legal Aid Scheme."—[OFFICIAL REPORT; 1st February, 1960; Vol. 616, c. 706–7.]
I hope I may remain within the bounds of Parliamentary order in describing that as a somewhat "phoney" argument, but it is just as good or bad now as it was when it started in the Rushcliffe Committee. It has always been the same argument, that there is a difference between an emergency which calls in National Assistance—and in that case we must leave the nest egg alone—and the emergency of litigation, in which we can creep up on the nest egg and suck out the contents. It is the only defence which has ever been put forward.
I have listened to these discussions. It is a curious view which everybody takes of the assisted litigant. He is always a plaintiff with a somewhat doubtful but plausible case. Of course, he may just as well be a defendant. Will the hon. and learned Gentleman tell me what the difference is between the man who gets, let us say. an illness or, if the hon. and learned Gentleman likes to take the other case, an industrial accident, or something of that kind, and, finding, as is so common, the Government's, the National Assistance or Industrial Injuries allowance, insufficient, has to have recourse to the National Assistance Board, and somebody who gets knocked down by a motor car and suffers from an injury and desires to recover some of the damages, at any rate, from the motorist?
Or let us take the motorist himself. It is nowadays—and here I shall have the enthusiastic support of the hon. Member for Crosby (Mr. Page)—possible for people in quite humble circumstances to own a motor car which is occasionally a peril on the roads. And that may have been the motor car which caused the accident; and even the motorist may be in need, and properly in need, of some assistance in his litigation.
If we are to go on with this theory of sudden emergency, litigation always being a sudden emergency, what about the case which the hon. and learned Gentleman will have well in mind—either party in a divorce suit? Where is the sudden emergency? What has happened? Is it that they have quite suddenly decided life has become intolerable? Or that one has caught the other partner out in some assignment of a nature which could be the basis of divorce proceedings? It might apply to either side and be the result only of an accident.
It is a curious philosophical distinction between the emergency of litigation and the need for National Assistance. A man who suffers an accident of some sort may not be entitled to anything but National Assistance. His circumstances may be such, as I said just now, that National Assistance is insufficient. But in all those cases it is a pure accident whether the calamity takes the form of something rather sudden or something which may happen at one moment but continue for a considerable time. There is no philosophical, sensible distinction between the two things. The extraordinary theory that there was a distinction was adopted by the Rushcliffe Committee, and I think its source was the idea of the assisted litigant as a rather plausible plaintiff with a rather indifferent case. That is what he is often thought to be, but there is no reason for that theory. I suggest that it is about time that we put this right.
It is proposed here to bring in the capital disregards appropriate to National Assistance. I will not go through paragraphs 2, 3, 6, 7, 8 and 9 of the Second Schedule to the National Assistance Act, because I do not think anyone wishes me to do that at this late hour, and I will put the argument shortly.
In some cases and to some extent we have a rather similar effect to what might have been produced by another Amendment on the Order Paper which has not been called and which would have dealt with the problem in a different way. It is nevertheless an invitation to work it out according to the rest of the Act first and then to disregard certain capital provisions. One of the first of them is what are called in that Act "war savings"—and the definition would cover a great deal more nowadays than what are commonly regarded as war savings—in certain forms and up to a maximum of £375.
There is another provision which contains a smaller sum where it is not a case of small savings; and then there is a restriction to certain classes of savings. They are, broadly speaking, such things as National Savings Certificates, a balance in the Post Office Savings Bank, and that kind of thing. All of us who have had to advise people about National Assistance—and I am sure that we have all had to do it at one time or another—know perfectly well how very important these disregards are. I will not dwell on that tonight, but, once we get rid of the somewhat bogus definition about which I have been talking, I think it is perfectly clear that there ought to be similar disregards in relation to legal aid.
I listened to my hon. and learned Friend making an excellent case against the curious discrimination against small savings which is apparent in the Bill, and I will not try to repeat it. I can only say that the Solicitor-General has left me quite unconvinced, and I think he has left other hon. Members unconvinced, that small savings have had fair treatment in the changes now proposed. It is extraordinary that an hon. Member from this side of the Committee should have to lecture the Conservative Party, as I am lecturing them, on the desirability of not depriving people of their small savings except in very critical circumstances. My right hon. Friend the Member for South Shields (Mr. Ede) called attention to the slender distinction between these small savings.

The Deputy-Chairman (Major Sir William Anstruther-Gray): Order. I am reluctant to interrupt the hon. and


learned Gentleman, but I hope that he will not go back to the last Amendment; we have already dealt with that.

Mr. Mitchison: I am obliged, Sir William. I, too, hope that I shall not go back to it. I am trying to have certain capital disregards which are applicable for the purposes of National Assistance applied for the purposes of legal aid. The effect of these capital disregards will be to allow people to keep a certain amount of small savings which otherwise they would not be allowed to keep. This was the obvious effect, in the plainest possible language, in respect of National Assistance, and all I am saying—I do not wish to develop the point unduly—is that small savings are very important, particularly for people in a position such as that described by my right hon. Friend the Member for South Shields.
For that reason I hope that the Government, having been shown the illogicality of their argument and indeed the comparative absurdity of it, will accept the position and, with a broad-mindedness and generosity which they have failed to show so far, will accept the Amendment.

The Solicitor-General: The hon. and learned Member for Kettering (Mr. Mitchison) rightly pointed out that if there is an illogicality here—which I do not admit for a moment—it goes back to the very inception of this scheme. It was in accordance with the Rushcliffe Committee's recommendation that a distinction was drawn between treatment of capital under the National Assistance Scheme and under the Legal Aid Scheme. That was accepted by Parliament as a valid distinction in 1949, and it was again accepted by Government and Parliament as a valid distinction when the Regulations were made in 1950. When the matter was recently reviewed by the authoritative Advisory Committee which advises my noble and learned Friend on these matters, that Committee again endorsed the validity of such a distinction.
The reason for that, as one would expect from such a consistent body of opinion, is a weighty one. Firstly, the National Assistance Board is required to disregard completely the first £100 of capital, leaving aside the question of war savings. That compares with the dis-

regard under the Legal Aid Scheme of what is now to be £125, plus the further disregard of £75 for a wife or £75 for the first dependent child, and so on, in the way we discussed in the last Amendment. Thus, just resting there, the treatment of the capital in the way of disregards under the Legal Aid Scheme compares by no means unfavourably with that under National Assistance.
It is also true that there is a complete disregard of war savings up to £375. That is written into the National Assistance Scheme, as, under special war-time conditions, it was desired to encourage saving specifically in war savings. Where there is capital above £100 which is not war savings, the Board reduces the National Assistance at the rate of 6d. per week for every £25 above that £100 nest egg, and that amounts to a deduction of just under £5 per cent. per annum, so that where there is capital, other than war savings, above £600 no assistance is provided.
In the first place, I submit that the treatment of war savings is really quite an anomalous one. There is no reason why a particular type of savings should be disregarded disproportionately. Obviously, having been written into the National Assistance Scheme and people having had reasonable expectations aroused, it is very difficult to deal with it; but there are very strong reasons for not writing it into the Legal Aid Scheme— reasons which appealed to the Rushcliffe Committee, to the Labour Government who introduced the scheme, and to the Advisory Committee since.

Mr. Mitchison: I expected the hon. and learned Gentleman to say that, and I think it right to say to him that, if the Government had been more generous in extending the ordinary cash limit for capital, then I doubt whether there would have been the same weight in this proposal.

10.45 p.m.

The Solicitor-General: That is only the first of the fundamental objections of principle.
The second, which appealed to the Rusholiffe Committee, the Government in 1949 and in 1950, and the Advisory Committee and the Government today, is that the emergency which calls for National Assistance is quite a different


type from that which calls for legal aid. That was the point which I endeavoured to make on Second Reading and again in Committee.
The fact is that where a person falls into indigence which calls for National Assistance, it is not reasonable to expect him to exhaust all his savings before giving him assistance. What is reasonable is to expect him to draw gradually on his savings, if he wishes to eke out or supplement the income which is vouchsafed to him by the National Assistance Board. But, as I pointed out on the last Amendment, litigation is unlikely to be recurrent. It is an emergency of exactly the type for which the capital has been accumulated, as the Rushcliffe Committee and the Advisory Committee pointed out.
The hon. and learned Gentleman asked what was the difference between illness or industrial injury and being knocked down in the street. The answer is that someone who is knocked down in the street and who applies for legal aid hopes to recover damages from the wrongdoer, and does do so in 85 per cent. of the cases. The hon. and learned Gentleman asked about divorce suits, but I should have thought that divorce was a calamity which one expects to meet not more than, I hope, once or twice, or three times at most, in a lifetime. That is very different from the sort of continuing emergency which one gets under the National Assistance Scheme.
It is also important to consider how the Amendment would work out in relation to the concept of the Legal Aid Scheme, a scheme to help those of small fixed means. I hope that this will appeal to my hon. Friend the Member for Tyne-mouth (Dame Irene Ward). In order to assist such people, one has to tax; and one has to tax not only the Surtax payer, but the person of small means, the person living on a small fixed income.

Dame Irene Ward: Relief could be given to them.

The Solicitor-General: It seems to me to be fundamentally unfair to tax comparatively poor people in order to enable comparatively rich people to do what they are otherwise capable of doing.

Dame Irene Ward: My point is that the Government should not tax those living on very small fixed incomes. I should be delighted if my hon. and learned Friend would move in that way and advise the Chancellor of the Exchequer to introduce a relief of tax in his Budget next week.

The Solicitor-General: It is very difficult to avoid tax. If we manage to exclude them from direct taxation, many of those of small means will still pay tax, for we still have a very substantial system of indirect taxation. There will always be a point where the tax begins, and it would be wrong to tax people who are less well off for the benefit of those who are better off, if the latter can afford to perform the functions for which it is proposed to give them assistance.
Let us see how the new Clause works out against that background. It would have the effect of exempting the first £125 of disposable capital—under Clause 2 (1, b). Secondly, £100 is disregarded under paragraph 3 (a) of the Second Schedule of the National Assistance Act. Thirdly, £375 of War Savings are disregarded under paragraph 2 of the Second Schedule of the National Assistance Act. The litigant may be a married man, and if his spouse has a second £375 of War Savings that too is exempted by paragraph 6 of the Second Schedule to that Act. In addition, a further £500 would be disregarded as such, but would be treated as the equivalent of 10s. a week disposable income in the way that I described when I was dealing with the disregards under the National Assistance Scheme. What one therefore gets is that an assisted person could be eligible for legal aid with a capital of £1,475. The only effect would be to increase his disposable income by £26, and his maximum contribution by under £9.
Is it right to assist somebody who has a capital of £1,475? That is not the whole of the capital, because once one invokes the National Assistance Regulations one does not disregard only the first £2,000 or £3,000 of the value of his house, and half the value above that, as one does under the Legal Aid Scheme, one disregards the whole of the value of his house, whatever its value. He could therefore have a house worth £5,000 in addition to the £1,475 capital which would be disregarded under the Amendment. Indeed, he could, if he


bought Blenheim Palace and had only £1,475 in addition to that, be eligible under the Amendment.
If he is a commercial traveller, with a car and a television set, they are all disregards. Is it right to assist people with those means who can, I submit to the Committee, assist themselves and undertake unassisted their own litigation? In my submission it would be wrong, and this Amendment should therefore be resisted.

Mr. Mitchison: I am not concerned to go into detail about the disregards for the purposes of National Assistance. What the hon. and learned Gentleman has in effect been doing is to criticise those. If those cars are to be disregarded for the purpose of National Assistance, and not to be disregarded for the purposes of legal aid, we are driven back to the distinction he seeks to draw between the two types of emergency.
I say with all the vigour that I can that a great deal of what the hon. and learned Gentleman has been saying has been simply a criticism of the Legal Aid Act and the Legal Aid Scheme. He has been talking as though there were something wrong in providing legal aid for people who might not have started, or wished to start, any litigation themselves, but who might be defendants, and whom for many years we have recognised should be entitled to assert or defend their rights in courts of law, even if to do so they required some assistance from public funds.

The Solicitor-General: The hon. Gentleman does me an injustice. The Legal Aid Act in its Long Title makes legal aid and advice available for "persons of small or moderate means." That is what I seek to endorse, not criticise. I say that the Amendment provides for people who cannot properly be described as persons of small or moderate means.

Mr. Mitchison: All I can say to that is that exactly the same argument would apply as regards National Assistance. When National Assistance is provided, certain things are disregarded, because it is thought that they are not things which should disentitle a person to receive National Assistance out of public funds.
What is the difference on these lines? On that sort of argument, I should have

thought that, if anything, there should be more disregards in the Legal Aid Scheme than in the other, because it at least includes persons of moderate means and persons of moderate means are not always—indeed, seldom—successful in getting National Assistance. It is another somewhat bogus argument and I hope that the Solicitor-General will think out the consequences of what he is saying before he gets up and draws these curious distinctions.
I turn again to the emergency. This is absolute nonsense. It is none the less nonsense because it started with the Rushcliffe Committee and has ended today with the hon. and learned Gentleman himself. I agree with him that if the Government had been generous in their treatment of capital in other parts of the Bill, there would have been no need to move the new Clause. That is the reason why, in 1949 and 1950, this rather illogical distinction between the two kinds of disregard was accepted.
The Government, however, have been remarkably stingy about the capital limit, to put it in general terms, and for that reason it has become necessary to move the new Clause. Once one begins to move it, one is compelled to see that there is no real distinction between an emergency of one kind, say, a broken leg in an industrial accident, and an emergency of another kind, a broken leg when somebody is run down by a motorist. It is true that the results are different. One is a claim for Industrial Injuries benefit and the other is an application for legal aid, but the difference is sought to be justified on the ground that the emergencies are different. They are not different. They are each the consequence of an accident in a case of that sort.
When one considers a spouse who is being brought before the court in divorce proceedings, I find it highly artificial to call that an emergency of the sudden and calamitous character which, apparently, the Solicitor-General attributes to litigation of any kind. It is not quite as bad as that. People have rights and they are sometimes entitled, and should be assisted, to assert or defend them. I fail to see any distinction between National Assistance disregards and the disregards that logically there should be in these proceedings. I am well aware that we are a profoundly illogical race


and that, I suppose, unreason and authority joined in unholy matrimony may once more prevail, but it is quite wrong.

Mr. A. R. Wise: I make an appeal to the hon. and learned Member for Kettering (Mr. Mitchison), who has argued the case cogently and has put it to us as an extremely hard case and has had it turned down absolutely fiat, almost flatter than any case I have heard turned down for a long time. He owes it to himself and to the high principles of his party to make certain that hon. Members opposite go into the Division Lobby on this issue.

Mr. Page: Many of us were shocked to learn that the resident of Blenheim Palace, with £1,400, could get National Assistance. The figures which my hon. and learned Friend the Solicitor-General put forward were rather shocking. As the hon. and learned Member for Kettering (Mr. Mitchison) said, that was criticism of the National Assistance scale. It is, I understand, argued that there are plenty of disregards under the Legal Aid Scheme and one does not need to apply anything more or to apply, as is suggested by the new Clause, the National Assistance scale.
What has not been brought out. either in this discussion or in the one on the previous Amendment, is this. Much has been said about dependants' allowances, the £75 for the first child and the £50 for next, but this may not be taken into account against the capital. That may already have been eaten up in allowances against a small income and they cannot be taken into account twice. So, the person with a small income—say, the £350 person—may have had account taken of all these disregards against his income.

11.0 p.m.

The Solicitor-General: With great respect, that is not so. These are capital disregards.

Mr. Page: Am I right, then, in understanding that a child allowance can be taken into account twice over, both

against income and capital? I have no doubt that the area offices of the National Assistance Board have not taken it into account in that way; those with which I have had to deal have never done so.
Surely the argument here is that we might be taxing those of small means to help those who are better off. It is just the contrary argument that I was trying to make on the previous Amendment, and which applies to this one. There are those who are well off who are entitled to legal aid. We can compare those cases with the pensioners who have a small amount of capital, but who are refused legal aid. The Solicitor-General has said again and again that if the capital is more than £500 it is discretionary to grant legal aid. In the cases before me in practice that discretion is not exercised and, from these debates, I hope that it will be exercised in future. If these people have capital over the £500 mark they are disqualified straight away.
I do not think that the Amendment of the hon. and learned Gentleman the Member for Kettering is right, but at least it has given us the opportunity to argue over these people with small incomes and small capital.

The Solicitor-General: I would just draw the attention of my hon. Friend the Member for Crosby (Mr. Page) to what the Advisory Committee says on this very point:
The Law Society inform us that this is not so and that the committees grant legal aid where disposable capital is larger than £500 if in their view the cost of the proceedings will be greater than the maximum contribution which the applicant would pay if he got legal aid.

Question put and negatived.

Bill reported, without Amendment; as amended (in the Standing Committee), considered; read the Third time and passed.

Orders of the Day — ADJOURNMENT

Resolved, That this House do now adjourn.—[Mr. Wakefield.]

Adjourned accordingly at four minutes past Eleven o'clock.